Challenger Limited (CGF) Earnings Call Transcript & Summary

Good morning, everybody, and welcome to those in person and online to Challenger's 2026 Investor Day. I'm Mark Chen, Challenger's General Manager of Investor Relations. We are coming to you today from Sydney. Before we begin, I'd like to acknowledge the Gadigal of the Eora Nation, the traditional custodians of the land on which we are hosting this event today and pay my respects to elders, past and present. Today, you'll hear presentations from a number of the Challenger team with a quick break in between. For those of you in the room, as a matter of housekeeping, can you please turn your phones on to silent. And for those that are online, please let us know if you have any technical difficulties or require any assistance throughout the morning. As you'll hear from today's presentation, Challenger is positioned to capture a large and growing retirement income opportunity. We are unlocking demand by embedding annuities into the retirement ecosystem through strategic partnerships with super funds and platforms, reducing frictions in doing business with Challenger, and we're investing in scalable technology. We continue to drive growth through our core capabilities in distribution, investment management, asset origination and through initiatives such as Calix Re, our offshore reinsurance platform. Together, in conjunction with the impending introduction of the APRA capital standards, the new APRA capital standards, these will support better retirement outcomes for customers and drive sustained long-term shareholder value. Today's presentations will be followed by a Q&A session, both in the room and questions coming in online and via telephone. After Q&A, there will be an opportunity to meet with the leadership team over refreshments. I'll now hand over to Nick to get us underway.

Thank you, Mark, and good morning to everyone. Welcome to our 2026 Investor Day for Challenger. So it's great to see so many in the room here. And also we're joined online by lots of parties locally and offshore. So today is an opportunity for us to share with you our strategy. You'll hear how we've worked to unlock the demand for lifetime income and with that, a key driver of growth. You'll also hear how growth will come from a broader number of channels, including offshore and a broader range of guaranteed and income solutions. A second key element you'll hear today is how we'll drive returns from growing spread and fee earnings, running an efficient and scalable operational core and a less capital-intensive growth trajectory. Thirdly, the risk profile for Challenger has changed. The capital standard reforms remove procyclicality from our capital base and replace it with capital strength and flexibility. The world, as we know it, is in the grip of the age of aging, which will reshape society and the economy over the decades ahead. Our focus and commitment to our purpose of financial security for a better retirement has embedded in Challenger a set of unique capabilities that is delivering a fundamentally different growth trajectory today. Before I talk more to our own transformation and the opportunity ahead, I want to share some facts on what is well described as the age of aging. On one level, our business has a demographic tailwind that will blow only stronger and will run through to the 2050s. More immediately, by 2030, 1 in 5 Australians will be aged over 65. The last of the baby boomers will enter retirement, the impact of which will be no less significant than their impact shaping the world this past half century. By 2041, our older Australians, those 85-plus, will grow 140% to 1.3 million people. In raw numbers, 285,000 Australians are retiring every year, equivalent to a city the size of Wollongong. Our life expectancies are continuing to extend. For a couple entering retirement today, one is expected to live into their early '90s and potentially many years beyond. Australians can then expect on average to spend around 30 years in retirement. While our country has the highest median super balances in the world, we rank lower against many for financial confidence in retirement, which begs the question of why. We run a system where professionally managed compulsory superannuation collides with individual accountability in retirement. Financial confidence is correlated to certainty. And today, we have a high outcome variability and a low outcome certainty. We know from our research that guaranteed income makes a lot of difference to financial confidence. A retiree faces a complex financial equation, funding through decades or more of income, needing to manage inflation risk, longevity risk and market risk. The majority of drawdown strategies today are ill-equipped and are creating significant individual risk. A retiree also has to manage their own physical and mental health and personal confidence, including social connection. It is also increasingly well understood that financial stress contributes to poor physical and mental health for older generations. Financial confidence, on the other hand, contributes to better physical and mental well-being through the lifespan. Recently, we shared the stories of [ Robin Rhondacoot ] and [ Jenny ] and [ Tom Croucher ], who with the help of their financial advisers set up a guaranteed income for life. Their motivations and circumstances differed, though the positive impact certainty has had on their confidence in retirement that was the same. Commonly, key motivations and drivers for our customers are taking away fear, simplifying one's financial affairs, ensuring financial certainty to your spouse or family and ensuring you do not become a financial burden in later life. Sound retirement plans give people confidence to focus on what matters most, a sense of purpose, connection and health, 3 things that are enabled by having financial certainty. If what I have described are individual motivations and drivers, how does this roll up across the nation? Our savings system was never designed for the decumulation wave and longevity challenge that's upon us. Australia is now addressing the significant gap between our accumulation system and a system fit for retirees. It is an inevitability that the system continues the shift we have seen these past years from one size fits all to one that better meets the very individual needs we have in retirement. We're seeing the first industry leaders emerge, and they will set a new standard for super funds and the wealth industry broadly, and this represents one of the largest opportunities we see ahead. If I look back to when I first stepped into the CEO role in January '22, Challenger had the right purpose, financial security for a better retirement. But as a business, there were changes required. It was an inherently complex and busy business with 3 operating divisions, multiple focuses and cost and scale challenges. We recognized key areas to protect our core Challenger brand and purpose, our investment management platform and our team and culture that back the strategy and purpose. There were 3 imperatives: unlocking growth, improving core financial returns and resetting the inherent risk of the Life Company balance sheet. You'll hear today the significant progress we've made and how this now unlocks the core strengths of our business and positions us for the retirement megatrend. We think about our competitive advantages across 3 core strategic pillars: retirement leadership, investment excellence and talented team and capability. We're a business that has, at its core, a focus on income for retirement. It's what we are known for and what we are uniquely positioned to scale. We have run a strategy to strengthen and grow our brand and market position. This is working, and our brand recognition continues to rise. As the industry has now begun to awaken to the needs of Australian retirees, we have announced key partnerships to unlock that growth across platforms and super funds. We're also helping redesign what good retirement advice looks like. We've integrated with advice technology platforms so that advisers can, for the first time, model retirement plans, incorporating guaranteed income embedded in their core tools. By doing this, we're building the connective tissue between the accumulation system and the decumulation system. We're making lifetime and term annuities accessible in ways they simply were not before. Our retirement income market will continue to evolve, and I see our story as unlocking demand for our core products through retirement advice and partnerships, accelerating our range of income notes and income funds, and new product development to meet more needs in retirement, especially into generational wealth transfer and aged care. Our growth is not just from Australia. As you have seen in previous results, we have strengthened and grown our Japanese reinsurance partnership with MS Primary. Whilst Australian usage of guaranteed income is now pleasingly growing more strongly, we have proximity to a number of more established and larger markets across Asia. Over the past decade, we have developed our reinsurance expertise across a number of different product types and currencies. In what is a very exciting development, we will launch Calix Re, a Bermuda reinsurance vehicle. Our model for Calix Re is an extension of our core capabilities across asset-intensive balance sheet management, structuring and origination. We're taking a measured approach to the ramp-up phase to ensure we get it right. And from there, our team will be looking to broaden the reinsurance relationships we have. Turning to investment excellence. We can confidently say that we have a balance sheet that is the strongest in our history. Demonstrating our strong capital position in February, we announced an initial $150 million share buyback, which continues to progress. Subject to regulatory and internal approvals, we expect to be in a position to return more capital to shareholders in the near term, and Alex will speak to that shortly. We've welcomed Damian Graham as our new Group CIO, who you'll hear from today. Damian is leading our newly combined investment and balance sheet teams at Challenger. Our investment capability is a competitive moat. It is what allows us to generate attractive risk-adjusted returns to back the promises we make. Our proven capability in asset origination is a key ingredient for a business like ours. We recognize we are at a unique time and the team's mission is evolving. Ahead, we see significant growth, and we are ensuring we can deliver returns and originate at a greater velocity. With the changes to capital standards, we will continue to deepen our asset origination across fixed income to enable balance sheet remixing. APRA's new capital framework for longevity products is a game changer for Challenger. It's a capital framework that better supports the products we specialize in. As we've noted previously, the reforms matter for 3 reasons. First, it improves capital efficiency. The revised framework will see our asset allocation change to being less capital intensive, supporting growth and generating excess capital. Second, the changes remove procyclicality. Previously, market stress precipitated capital stress. The new standards align the basis of valuing assets and liabilities, removing that volatility, making the balance sheet predictable and resilient. Third, the new standards changed the economics of the retirement income market. By lowering the cost of providing longevity products, APRA has created a more favorable environment for innovation and for system growth. Our growth will also be driven by fee-earning business lines. We see demand for the yield that we originate, driving strong growth for income solutions. Our proven credit experience through market cycles will set us apart. This year, we launched our inaugural LiFTS note. LiFTS meet the structural demand from AT1 investors as those securities roll off. The structure is designed around alignment where we originate securities and provide first loss protections to investors. Success here will see us grow ongoing issuance, which will drive capital-light earnings whilst leveraging our core capability. And in our Fidante business, for 20 years, it has been a partner to investment talent. Our teams provide distribution excellence along with operational and administrative infrastructure. This year saw us reorganize the teams that lead and support Fidante to drive better alignment and performance. We all recognize what a tough few years it has been for fundamental stock pickers, many of which have been impacted by benchmark underperformance and a reallocation away from active risk. Whilst the future is uncertain, we can see many historical parallels to this moment in past market cycles. We remain very confident in the Fidante model to deliver best-in-class investment products into our core Australian and select international markets. You'll hear shortly from Naomi Cunningham, who is leading the business alongside John O'Keeffe. These past years, we've actively sought to redesign our business to improve our competitive position. The core of our culture, the passion for our purpose, our talent and the collaboration and innovation across our teams, that all remains. Today, you'll hear more detail on the redesign of our investment management capability. As we look to the future, we'll be managing insurance capital onshore and offshore and a growing range of income notes and funds. We anticipate strong future growth and ensuring we are tooled up to meet that with necessary capacity and skill is essential. The last 4 years has seen us move much closer to our customer. The successes we're seeing today are testament to our customer focus and expertise. Technology is a key part of our capability set. And 2 years ago, we started to unpick legacy systems not fit for the future. Core to our redesign principles has been removing customer friction, driving operational leverage and creating a data and AI-enabled environment. We embarked on a technology and data transformation that is reshaping how we operate. Parts of the program have started going live. However, the real value will be realized when the whole system build completes. We're undertaking the build in partnership with Accenture, a world leader in these complex transformations. Through testing, we have seen very strong adviser and user feedback of the customer portals and the core ALIP system. Once completed, the program removes legacy to enable innovation and automation for efficiency and growth. System integration work is ongoing and once completed and tested, will go live. Today, we'll hopefully serve to underscore how much simpler a business we are in 2026. You will see today how we're thinking about our strategy to deliver sustainable and scalable returns. It begins with trust as the guarantees we provide will often last for decades or longer. At our core, we are a spread business, funded by longer-duration liabilities from Australia and offshore, where we invest those to earn an excess return. Investment excellence is a key differentiator. We have an origination platform that has continued to evolve to ensure we can deliver at scale, high-quality risk-adjusted returns. That combination of longer-dated liabilities and asset origination meets at a time where we see materially higher demand and growth. Our business is shifting gears to one that is more capital efficient as we realize the benefits of the changes to capital standards. Our mission over this period is to accelerate our flywheel, which will create material shareholder value. Challenger has been a leading voice for retirement for decades, and this is core to how we have built our market position and our reputation. We've advocated for why retirement is fundamentally different to accumulation. We've been driving the discussion at all stages on what a good retirement looks like across industry, regulators and policymakers. Our work is fact-based and built from extensive experience. For decades, we've been a leader in adviser training for retirement. The enduring role we've played educating advisers and their customers is only going to grow from here. We've now brought all that together to leverage our decades of thought leadership and research into longevity and retirement with the forthcoming launch of the Challenger Institute for Lifetime Income. I'm really excited by the opportunity for the institute to advance topics that will shape how retirement is delivered for decades to come. As we progress through today's session, I hope that you are as excited for the opportunity for Challenger's growth as we are. The team will take you through today how we will win. We'll talk through how we're building embedded retirement solutions with partners that will unlock the significant demand for retirement income strategies. We have a panel discussion to highlight an example of how we're helping to reshape retirement advice and how it will be delivered at scale. We'll talk to the strength and resilience of the balance sheet, our strong capital position and how we'll retain sufficient capital flexibility to support growth as well as uses of excess capital for shareholders. The transformation in the past years has ensured that we meet this moment as a simpler, stronger and more focused business. I have never been more confident in Challenger's strategic position or more excited about what lies ahead. I'll now hand over to the team to take you through the detail, and the first presenter is Mandy Mannix. Thank you.

Thanks, Nick. Okay. Good morning, everyone. As Nick said, I'm Mandy Mannix. Since joining in 2022, I've been Challenger's Chief Executive of Customer, having spent more than 30 years in customer-facing roles here and offshore. And now as the retirement landscape in Australia is going through a material shift, I'm excited and privileged to be taking on a new role as the principal advocate for retirement for Challenger. When I last stood here 3 years ago, I talked about how Challenger was repositioning the business around the customer, listening and responding to their needs and understanding how Challenger was uniquely positioned to meet those needs. Both the business and the retirement system have progressed significantly since then. As Nick has outlined, we've done the work to position Challenger as a growth-enabled business, ready to win as this significant retirement income opportunity has arrived here in Australia and offshore. Our growth opportunity is underpinned by unique demographic and industry tailwinds. We have a world-class superannuation savings system that is predicted to see retirement assets grow fourfold to $4.5 trillion over the next 20 years. And our aging population, one of the more significant trends with 780 Australians retiring every single day. However, as more Australians move from accumulation to decumulation, the vast majority today are not transitioning to products that are designed for this stage of life. And this is despite numerous research, both here and offshore, and our own Challenger Retirement Happiness Index showing that 76% of people would be happier with a guaranteed income for life. But this is changing. Unlocking demand for retirement solutions is core to our focus and where we have been driving change. Today's presentation is not about what we will do, but about what we have done. Together with my colleague, Adrian Aardoom, we're going to share 3 key messages. First, how as 3 of the largest super funds have announced their retirement propositions to market, Challenger has solidified its leading position and has been named as a partner of choice for each of them. Second, how Challenger has invested in the retirement ecosystem, making it easier for advisers to write lifetime income solutions, but perhaps more importantly, how our investments in Ignition Wealth, in IFF, and in Iress mean it will be difficult now for an adviser not to model one. Lifetime income will become innate to the advice process. Something that has never been the case before. And finally, how Challenger's investment in its own technology and brand over the last several years means we're ready for this. When new customers come to Challenger via advisers or super funds, they will have an exceptional and seamless customer experience. These unlock advice, they accelerate demand and they support millions of Australians to have a more confident and a better retirement. But retirement in Australia is changing. It's no longer a point in time. Consideration and planning for retirement starts well in advance of this spending and retirement phase. It is increasingly starting at the paying off debt or accumulating wealth stage, meaning the actual savings journey could be happening over 50 years of a person's working life. Semi-retirement is now becoming more commonplace and the imposts on retirement savings have increased dramatically. Retirement now is a 25- to 40-year journey that has multiple phases, and those phases are not homogenous. Just think of the spending habits of a 65-year-old versus a 90-year-old where their needs are very different. Yet we treat it as 2 dimensional. The problem we say often is, one, saving for retirement and two, an ongoing paycheck, but this ignores the inherent complexities of the shocks and sequencing risk. Moreover, it designs for the minimum. It does not design for living well. The asset allocation of an individual superannuation over their lifetime will have a significant impact on the ability of their portfolio to provide and meet their needs in retirement. Defined contribution super was built on a transfer of risk from the institution to the individual. And as an industry, while we've executed brilliantly on the accumulation phase with 60-40 portfolios and long-time horizons doing the heavy lifting for the average worker, retirement is where this model breaks down. The moment an individual stops contributing and starts drawing an income, the problem changes shape entirely. Sequencing risk, longevity risk and inflation risk all arrive at once, and they don't care about the average retiree. They respond to the specific path of one retiree's returns, spending and lifespan. The cost of getting these decisions wrong is highest and the ability to recover is the lowest at the point of retirement. So solving for retirement is not a refinement of accumulation. In retirement, an individual will evolve their allocation, their asset allocation, potentially starting with yield -- simple yield solutions, thereafter, requiring a guarantee and then support with other needs, including aged care and estate planning. Retirees face a number of risks that are heightened simply due to the life stage they're in. Think about one of these inflation risk. The impact of inflation on a retiree's purchasing power will be significant. While Australians over 60 or age 60 and over rather remain positive about retirement, the rising cost of living continues to impact their lifestyle, their financial security and the confidence they have that their money will last, in fact. According to the Challenger Retirement Happiness Index, 2/3 of Australians aged 60 and over believe inflation and the cost of living are the most important thing to plan for later in retirement, and this is particularly acute for women where they often have less super, but they live longer. Rising inflation drives up costs for everyone for everyday items such as groceries and health care. And for those people, like most of us, when we're working, we're receiving a salary and some of the impact of these price increases is softened by an increase in wages. A retiree doesn't have the option of a regular salary, but a CPI-linked annuity provides a similar outcome. The result without an annuity often is that a retiree will spend less. Millions of the retirees would not have the quality of life in retirement that would otherwise be available to them. The government and the regulators know it. The retirement income covenant and best practice principles are unambiguous in the need to add lifetime income to retirement strategies, and the industry is starting to respond. Lifetime income is going to be in the vast majority of portfolios. It started, and it will grow. Our house view on how Australians can live better in retirement is that the solution to retirement is layered, mixing a level of guarantee and yield. Our modeling shows that a 20% to 25% allocation to an annuity, be that a term annuity or a lifetime annuity, will deliver a better outcome for the retiree in almost every scenario. And Mercer research is even stronger. They state that substituting a 30% portion of the defensive assets in a traditional 60-40 portfolio to a lifetime annuity would lead to an increase in return of 1% from 6.3% to 7.3% or a 16% uplift in income for the average retiree. Tell me you wouldn't want that for your mother or father or your grandparents. Term annuities in many ways are similar to term deposits in that they provide guarantee income over a term of your choice and lifetime annuities provide regular guaranteed income for life. These can be used on their own as a retirement solution or as a building block blended with traditional assets like account-based pensions to create a retirement solution. The benefits of annuities are so much more than the prevailing interest rates. Allocating annuities to the defensive sleeve of the portfolio is a powerful strategy, providing certainty around income, the potential benefit to an aged pension and in many cases, increasing the estate balance. And that last benefit of increasing the estate balance is contrary to popular belief. The growth we've seen is a testament to how the product is being seen by advisers as an asset class in its own right and as an essential building block for a retirement portfolio with guaranteed income. Since we last hosted our Investor Day, the biggest developments in retirement have been superannuation funds and platforms building retirement income solutions in response to the RIC, the retirement income covenant and in the case of retail super, also in response to adviser demand. As these super funds have come to market, the position of retirement partner has been hotly contested. Challenger has been investing in the retirement system, demonstrating our experience and our commitment to better outcomes for retirees and as a result, has secured these partnerships. In the last year with BT, CFS and MLC, Challenger will be a retirement partner of choice for over 2 million Australians with 600,000 of them over 65 years old today. Our distribution strategy has been and will continue to be two-pronged, partnering with superannuation funds as they develop their retirement propositions and continuing to support and invest in tools that support independent financial advisers. Super funds typically service earlier-stage retirees with simple needs and where those members put their trust in their super fund to support them in making their choices. And this includes our partnerships with Colonial First State, NGS and MLC or IFAs where retirees have more complex needs and as retirees get older, giving them greater confidence to absorb those shocks and create solutions that are more tailored to their specific needs. Now this includes our partnerships with CFS, MLC and BT. Now to put power behind these channels, we've invested in critical industry tools. Iress workbench, for example, with 60% of the adviser market is a terrific example we'll delve into shortly. An adviser, independent or super fund aligned, would previously have had to jump through more than 4 systems to model and quote a lifetime income stream as part of retirement strategy. Friction and hurdles every step of the way. Well, Challenger and Iress have come together and solved this problem. Today, advisers through Iress will have the ability to create retirement income solutions for their members and clients through one single tool. Lifetime income will be surfaced and executing on it will be seamless. Our recently announced superannuation partners will continue to launch real innovation in how retirement solutions are delivered, moreover delivered at scale. These were highly contested partnerships that we have won, and they are a big opportunity for Challenger. With over $0.5 trillion in FUM on these platforms, we expect to convert a proportion of this to a lifetime income stream, and that will contribute to lifetime annuity sales. And it's not just Challenger that's seen these results. Our partner, MLC, recently stated publicly that their retirement boost solution, the one they put on MLC Expand, reached $500 million in flows in just 2 months. We're continuing to discuss partnerships with other providers in the retirement sector, and we're very optimistic about the future. We've already shared that to support our growth, we're simplifying our customer technology, and this means we'll be able to plug into all platforms. Digital tools are making deep inroads into the offers of super funds as they work to extend access to advice and will reduce the need for regulatory reforms around this. We have invested in Ignition Wealth and IFF, who are implementing digital advice journeys to automate the advice guidance process and improve efficiencies so that super funds and advisers can scale the number of retirement journeys that they deliver. These investments are ensuring that annuities are embedded upstream in the advice process and not just at product selection. Ignition's platform has shown to eliminate manual bottlenecks in financial advice and can deliver an 85% reduction in the lapse time to deliver regulated advice. They can improve adviser productivity by a factor of 15x and reduce associated overheads with advice by 60%. Ignition has been successful. They've confirmed partnerships with some of Australia's largest super funds to deliver digital advice at scale. Through our expertise and technology investments, we've established ourselves as the leading longevity income as a service engine embedded in partner solutions and well placed to capture future growth in a scalable way. I've excited you, right? The position we're in today is exciting. We're poised for the growth that is coming. But still for the most part, today, annuities are sold one-on-one through advisers. And so the adviser experience is critical to unlocking the demand for the product. We recognize that both advisers and customers need to have a greater understanding of what retirement income options are available, including how an annuity delivers that guaranteed income for life. And to help with this, we've been executing an integrated marketing plan, comprising investment in our brand awareness, including the Australian PGA and uplifting our content around different stages of retirement, so pre-retirement, retirement and later in life and options related to income that can be ingested by our partners and also found on our proprietary assets. The PGA partnership now in its third year is delivering sustained repeated brand exposure at scale through broadcast, live audiences and digital engagement. Importantly, this scale is translating into tangible outcomes with measurable uplifts in our brand health and lead generation over the last 2 years. And we're leveraging our partnership to get access to the players for additional content, which you'll see on the TV screens outside in the form of pro explains. As I hand over to Adrian, I just would like to reiterate the 3 points that I'm hoping you'll be able to take away from today's session. First, Challenger is and will continue to play a critical role in helping Australians achieve financial security. We've established strategic partnerships with superannuation funds, wealth platforms and advice technology platforms that will unlock material demand for annuities and will scale advice. And we've invested in our platform in a way that will not only support growth of the business, but provide us with the operational leverage to receive that scale that the Australian retirement system will deliver. Thank you, and I'll hand you to Adrian.

Well, thank you, Mandy, and good morning, everyone. My name is Adrian Aardoom, and I am the General Manager of Distribution. As explained earlier, we are in the process of uplifting our core customer technology, and this will be a game changer for Challenger. It will improve the customer experience, enable us to gather and analyze customer insights and respond with new offers and experience through partners much faster as well as onboard and scale up new partners. It will also enable us to deploy AI and analytics at scale throughout the organization and service customers and partners at a higher velocity than we've previously been able. The mix of these investments, combined with our existing strengths in the core financial engine give us the flexibility to launch income as a service where we could partner with a range of diverse and trusted organizations like banks and brokers to broaden the reach of our products to Australians. Today, there is friction doing business with Challenger. The customer sales process is largely paper-based, which presents hurdles for advisers and customers wanting to purchase a Challenger product. The manual processes also create operational inefficiencies for us at a time when we are growing and planning to scale the business. Our new platform will make it much easier to do business with Challenger. Customers, advisers and partners will receive a seamless digital experience. They will be able to fully originate services online. Advisers will be able to write new business far more efficiently, and we will improve how we integrate our offering with super funds and platforms. With an improved service, we will accelerate the pace of bringing innovations to market. And the platform will be able to scale and support business growth through automation and straight-through processing. We know we have more retirees than ever before, and just 10% of Australians are currently getting advice, and there is a large unmet advice need. Technology will make advice more accessible. We know that traditional investment portfolios when blended with lifetime income can enhance total portfolio outcomes. And with this, we expect the adoption of lifetime income streams to be greater. To demonstrate this, I'd like to share what the advice process without lifetime income streams being adopted looks like today. As you can see on the slide, I have oversimplified the advice process into 8 steps. And the key takeaway I'd like you to glean is that it is linear. The majority of the journey can be run from Xplan, and there is minimal need to leave the system. Essentially, the process is as efficient as the current technology allows it to be. Over the page, now let's take a look at the exact same advice process with one change, and that is what it looks like when you introduce lifetime income to the advice process up until just last month, a few short weeks ago. That same 8-step advice process becomes a multistep and fragmented process with a number of manual steps across product research, modeling and execution. The process was cumbersome and disjointed, more time-consuming and created the need to leave the system multiple times as has been referenced earlier. The key issue is that lifetime income solutions were not well integrated into planning tools and that manual inputs were required to model outcomes. As a result, advisers were required to run multiple separate scenarios and manually complete elements of advice and implementation, which introduced friction and complexity. I think we've covered some of the hurdles, but just to give a little bit of context, during -- annuities were not surfaced during strategy formulation, and therefore, they were not part of the consideration set. But if somehow they did make it as part of the consideration set, annuities were not historically included in products such as wealth solver, which is a product comparison tool, which is a regulatory requirement to complete a statement of advice. And as I've already mentioned, there's the manual inputs required for pricing for stitching together statements of advice and the need to leave the system at multiple times. So today, this is what the advice process looks like when adopting lifetime income streams, and I'm very pleased to share it. What we've done with partners like Iress and IFF is address each of these pain points. The new retirement income solutions in these workbenches solves for the current advice workflow and makes the adviser experience smoother. For the first time, financial advisers can innately model retirement income plans and incorporate guaranteed lifetime income. This allows lifetime income streams to be embedded directly into the digital advice workflow from product comparisons through to real-time modeling and advice production. Together, we have achieved a key step forward that enables advisers to model scenarios dynamically and deliver advice more efficiently and consistently. By reducing friction in the advice process, we are driving greater awareness and adoption of lifetime income solutions that will improve client outcomes. I'd now like to move to a demonstration to show the end-to-end advice process to purchase an annuity using the Iress workbench and combining it with the Challenger customer front-end technology. We are bringing the entire retirement advice journey together in 1 seamless end-to-end solution. Iress Xplan integrates lifetime income products with account-based pensions. Advisers can model multiple strategy options and generated [ buzz ]. Model combinations identify strategic benefits and easily rebalance portfolios. They can also use stochastic modeling to stress test strategies against real-world client scenarios and provide a realistic view that strengthens their recommendations. We've developed a new digital quoting platform that removes complexity, delivering an instant seamless experience across all annuity products, streamline with fewer touch points, workflow automation and faster approvals. Digital verification and submission, automated instant notifications. There's a seamless application process via Challenger portal, and it will be embedding the same seamless process via third-party retirement planning and wealth management platforms and other distribution partners. It provides a single centralized view of all application details and documents, digitizing previously manual and paper-based processes, straight-through processing with greater efficiency and transparency. Where in the past, the customer would not know if their application had been received, they will now get that confirmation. Reinvestments of term annuities will be easier, no longer paper-based. We will continue to build our partnerships with super funds and platforms where this technology can be seamlessly embedded. What this technology enables is for the sales frictions that have existed for decades to be removed, and we expect this to assist with sales. Maybe to give you some more context, historically, as many as 50% of applications were double-handled that is sent back for missing ID or signatures. This experience, as you can imagine, created many frustrations for advisers customers and Challenger staff alike. We have always known we've got great products at Challenger, but now we've removed the friction to enable uptake. All right. Thank you. We now are going to move to the panel session, the future of advice. Joining me on stage, we have from Ignition, Terry Donohoe, Group CEO and Managing Director. From Iress, we have Sam Wall, CEO of Asia Pacific Wealth; and from Challenger, my colleague, Amanda Gardner, Head of Institutional and Retail Partnerships. Welcome to you all.

Sam, I'd like to start with you. Obviously, we've just seen that video. Many in the audience will know of Iress, and many here will have seen you speak in similar such forms as this. But for those less familiar, at its core, Iress Wealth sits at the center of the adviser workflow. Its flagship platform Xplan is widely regarded as the operating system for adviser practices used by as much as 2/3 of advisers in Australia. This deep market penetration gives Iress a critical role in how advice is delivered, scaled and regulated across the industry. So my question, Sam, is there anything I've left out in terms of Iress' market position that you'd like to add? And if I could ask you to please explain to the room a little bit about why Iress has decided that now was the time to build and deliver what Iress refers to as the lifetime income project?

Yes. I might start with your second question, if that's all right, Adrian. I think there's 2 important dynamics that have led to this moment for both Iress and for our partnership with Challenger. The first is, as the industry shifts, we've also needed to change and we've recognized that need to change. As Nick said earlier, we're in the age of aging. The decumulation wave is upon us. So I think the industry is more focused than ever before on holistic retirement planning solutions and outcomes for clients. I know there's been a lot of statistics quoted this morning, but the one we like to quote is there's around 700,000 Australians about to retire over the next 5 years. So Iress recognizes the opportunity to evolve our technology stack. We want to help address the retirement challenge and make it easier for advisers and their clients. So we see ourselves very much as an enabler in this space. The second dynamic is advice standards are shifting. The industry, I think, has done an excellent job over the last few years of raising the importance of investment risk, sequencing risk, longevity risk for retirees. And as Mandy said earlier, there's a growing number of funds offering lifetime income products to help mitigate these types of risks. And we're seeing a lot of funds these days putting forward these types of solutions and these mitigants into the -- as part of their retirement income covenants and their retirement income strategies. So the product class itself has become far more mainstream. And I think there's a greater need to ensure that this class of product is considered appropriately. As Mandy said, I think we're moving from the -- what's the rationale to include them to what's the justification not to include them. So I think that's a critical dynamic. But ultimately, these 2, we call them tailwinds have created increased demand to put it bluntly. So we're facing an increased demand for this type of product class. And from a technology perspective, from a wealth tech perspective, we do feel we're best placed to solve the -- how do we make these products more accessible for advisers. So that's the why now.

And you mentioned in there -- and I should say to the room, I'm happy to open up to the floor. But if I could just get you to expand a little bit on the evolved workbench that you touched on there. Can you just explain to the room a little bit how Iress has evolved the advice workbench to make lifetime income products a part of retirement planning comp?

Yes, absolutely. So our evolution has been in consultation with partners such as yourselves, other industry providers with our clients, importantly, and industry forums and industry feedback. So the solution, as you pointed out in the video, it embeds lifetime income products into Xplan's retirement planning workflow, but it's part of the onboarding process, which I think is the secret to a success. So it's within our wealth solver module. And just a quick side note, wealth solver has typically been reserved for product comparisons, and we have Xtools, which is for us, stochastic modeling and deep analysis and so forth. We actually broke that mold for this solution to actually include the modeling, the analysis and the workflow all within the wealth solver module. But the goal wasn't to push a specific product category or type, but we wanted to give lifetime income options the same airtime and consideration as the more traditional retirement products. So our solution does give advisers the ability to assess upfront very quickly the appropriateness of the strategy, the product selection and the features and benefits. So they can very quickly determine whether a lifetime income product may complement or even replace traditional retirement income stream strategies, might be an account-based pension. They can then readily compare the different products alongside each other, and then they can drill into the features and benefits that's relevant for the client, whether that's CPI indexation, reversionary, estate planning protection and so forth. The outcome of all of this means that these products are easily discoverable, comparable and quotable through our platform. And I know you like stats, Adrian, you've been badgering the last few weeks. We've been live for the last 4 weeks. And I would say the rollout is tracking extremely well. We've had a lot of high levels of adoption. I think the key stat is of the retirement proposals initiated in the last 4 weeks, we've seen around 3/4 of users have included lifetime income products in their modeling scenarios. So that's phenomenal.

That's an incredible stat. I do like that stat. Thank you, Sam. I hope the room like that stat as well. We're talking about the future of advice on this panel. We've been speaking about something that is, as you just say, 4 weeks old. It is hot off the press. Just want to give you the opportunity to talk about future road map and modernization.

Yes. So something that's well underway at Iress. It's something that's very exciting. It's a core strategic priority for us and our global CEO, Andrew Russell, is our modernization program of work. This is a multiyear initiative that will deliver AI-enabled products. It's going to simplify our technology stack and evolve our core platforms. And to help execute at pace, you may have seen the announcement we've actually partnered with Thoughtworks, which is a global technology consultant. Thoughtworks are going to help drive innovation and they'll consult on best practice and AI capabilities. But I guess the key question is what's the future of Xplan? It's modern, modular, API-native. It embeds AI and increases advice efficiency and delivers tools that further unlock the power of our data sets. So we're really excited about this program, and we're on track to deliver Phase 1 later in the year.

All right. Perfect. So we will move on to Amanda. I do want to come back to AI, though, if we've got time. Amanda, we heard earlier that Challenger has been successful in 3 material retirement income partnerships in the last 12 months, and you have been instrumental at winning each of these. Can you please share how technology has enabled funds to build confidence in helping more members plan for retirement?

Thanks, Adrian. Well, technology is absolutely being critical to helping super funds move from more strategy to the execution phase. So the super funds obviously have always understood their obligations under the retirement income covenant. And more than that, we heard Mandy speaking this morning about the research. It's clear that when you include lifetime income as part of the blended portfolio, you can get better retirement results for our members. And so the intent is clear, and the question was never whether to include lifetime income. It was -- the challenge has been around like how to do it because it has been so difficult because lifetime income hasn't been embedded in the standard processes in the industry as we've heard today. If we take the adviser process, for example, Adrian, you've already touched on it. They go to compare and look at strategies for their clients in their workbench of choice, and then they go to execute that via their chosen platform or super fund. And we historically have not been involved in either of those processes. And so as Sam has rightly said and we've said already this morning, this is now changing, and it's really exciting. So technology has helped remove the barriers from 3 particular friction points. One, members. So institutions like Ignition are helping members better understand their options at retirement to help inform them and educate them so they can make better decisions. Then we've got the advisers, institutions like Iress and IFF helping to model lifetime income alongside account-based pensions demonstrate the risks in retirement that advisers couldn't show clients previously and then show how lifetime income can result in better outcomes for them. And then finally, the customer. We've heard about the Challenger technology, customer technology uplift, and that's helping not only our direct customers, but super funds being able to more seamlessly implement these solutions for their clients. And so coming back to your question, Adrian, how has technology given the super funds confidence? It's been really, really material. And the work that Challenger, in particular, has been doing in these 3 key points alongside Ignition and Iress has been so critical to winning the partnerships that we have over the last 12 months.

Can you just tease it out a bit more for the room? How has super funds embraced lifetime income streams in the last 12 months? And then Terry, I will come to you next.

Thanks. Well, like I said, it's been a really fundamental shift in the last 12 months from strategy to execution. And as I spoke about just then, in technology, along with the retirement fundamentals and the continued focus in this area has really helped trustees to get comfort that retirement solutions can actually be delivered at scale consistently and with a repeatable and compliant process. And that's been a really critical starting point for super funds. But what's really interesting actually over the last 12 months is what we've seen is that it's very quickly moved beyond a compliant tick to meet the RIC obligations, and it's now becoming a really competitive advantage and edge for those that are executing on these lifetime incomes. So you'll see that with the partnerships that we've entered into. Funds are focused on more than just the product. They're looking to support a full retirement ecosystem. And so practically, what that looks like for super funds, they're launching their retirement income propositions, but they're also supporting through member journeys and education, tools and calculators for advisers, and they're forming strategic partnerships to scale execution and growth. Now as Mandy mentioned, these partnerships have been highly contested and BT, CFS, MLC and NGS have all purposely chosen Challenger through our expertise and our ability to help drive their propositions at scale. So importantly, we're seeing the proof points already out there, where these solutions are implemented well, engagement does happen and flows will follow. We're really excited about the last 12 months, but we think this momentum is going to continue in the 12 months to follow.

Thanks, Amanda. Terry, are you happy to maybe just give the room a little bit of context about Ignition, your company's sort of mission and the space that they operate in?

Yes, sure. So Ignition's mission and reason for being is to close the advice gap. And when we consider the advice gap from an Australian perspective, with 10% being served, as Adrian mentioned earlier, that means approximately 24 million people sit in the advice gap that don't access advice today. Ignition's purpose is to actually scale that and tackle that through enterprise technology. We can't do that organically, which is critically important. So we need to work with fabulous partners within Australia to actually really close that gap to 24 million people. And Challenger has been instrumental for the last 2 to 3 years when we look at the partnerships that Ignition has won, and you'll see a thematic when we talk about some of the names. But Challenger have been core to actually Ignition's success over the last 2 to 3 years.

Are you able to maybe talk a little bit about the history and how the formation came about any further?

Sure. So Ignition is around probably since 2014 in the Australian market, really tackling the advice gap back there through calculators and tools. We've got a great opportunity to come up to Europe. So we've built a lot of the business outside of Australia from a client perspective. Fundamentally, the engineering has all been done in Australia. So we're an Australian company, very proud of that, and we're now back in market here, having learned some of the propositional challenges that the rest of the world are solving.

Thanks, Terry. You spoke about partnerships and the importance of partnerships. You, yourself or Ignition has had numerous material partnership wins. Are you able to share with the rooms any of the public ones that you're able to talk to? And could you specifically explain what you are doing with these funds and how this will improve their ability to deliver retirement advice to more of their members?

Sure. So each of these funds recognize the actual advice gap within their own organizations and member banks as well. The publicly announced ones recently, UniSuper. Colonial First State hasn't really been out there, but I'm happy to say that they're a partner now as well. And AustralianSuper as well. So there's 3 that we can talk about today. With each, they're looking to actually provide world-class services to their from that perspective. When we look at it in that way, that means it's a continuum of advice capabilities. So everything from education and guidance down the one end, all the way up to advisers and comprehensive advice at the other end. So the core purpose of each of the firms is actually aligns incredibly well with Ignition. It's a focus to actually close the advice and make it more accessible to Australians.

It's a fabulous story. Congratulations. I just want to look to the room and see if there's anything that anyone would like to ask you on that point. No? You're welcome to jump in if you'd like to.

It's Lafitani from MST Financial. Very interested in how the distribution is evolving, although I was surprised that one of your hurdles was at the moment when applications are received, you can now get an e-mail confirmation that it's been received. I mean that should have really been around 20 years ago, not even 10 years ago. But be that as it may, with the Iress, to start with, like you're getting 2/3 or 3/4 of them now including it in their scenarios. Are you seeing follow-through? Or are they just testing the product? And so if you could give us an idea around that as a starting point.

Yes, I'd love to give you some more detail, but we're obviously in discussions with other providers. So we're absolutely seeing follow-through. It's early days, but we reserving the right to get into the details today in terms of conversions and so forth just because we are in confidential discussions with some other providers. But I just want to pick up on your e-mail comment. I agree. I think the next iteration for us too is to actually go through to fulfillments and execution and straight through. So we've got all of the data and the insights already built into Xplan. So that's a phase that we're absolutely looking at.

And maybe just 2 other broader questions for understanding. A lot of this -- a lot of the product development has really been around the pension phase, retirement phase. But of course, Challenger has a lot of term annuities throughout the investment sort of journey. So are you solving for all of this? And is that a focus? Or is the attention primarily on the pension phase at the moment?

Yes, I'm happy to take it. Yes, I think there's a very clear and wonderful opportunity in pension phase, and I think that's the reason why you've seen us lean into this. But the core customer technology uplift focuses across all products, accum and decum term annuities and lifetime annuities. And so that digitized seamless experience that advisers will experience will be across all products regardless of whether accum or decum, whether it's new business or reinvestments or whether it's even just generic client maintenance.

Do you want to just talk about...

Yes, sure. Yes. And Amanda, welcome to jump in.

Maybe I should ask a quick -- my last one is about platform integration. So maybe I can quickly jump in with that as well. So a big part of this to succeed, we will have to have a lot of the platforms integrated, and we've had a few names mentioned. And maybe 5, 10 years ago, there was a big fanfare around Challenger getting platforms -- sorry, annuities on platforms. And now we understand that was only really reporting. So could you just sort of explain what the difference was to what you announced previously to what it is now and how many platforms are actually on this journey for integrations?

Yes. It's a fundamental difference. And I mean you mentioned it was largely consolidated reporting. And what we are now seeing is rather than being bolted on to the side being integrated in. And it's not an overnight process, but an instantaneous process. And so your earliest point, is around e-mail notifications, just gives you some context about how far we -- the steps that we are taking and how big they are and momentous they are for our business right now. So in terms of retirement platform partnerships or RPPs, that goes broader than the 3 partnerships that Amanda has spoken to. And that will see our retail products be seamlessly integrated with a broader range of retirement platforms. And then over and above that, Amanda has spoken about Challenger supporting 3 major platform partners to build out their retirement income proposition. So that's another layer over and above. And so that seamless integration is direct with Challenger, but also via large parts of the retail advice market moving forward. So it is a material change. All right. I'm loving the interaction, and I did want to encourage audience participation. I am looking around the room, but I am going to, in the absence of anything else, come back to yourself. Terry, are you able to just give the room a bit more context, the scale, the uplift in the scale in advice journey that you are achieving with your wins.

Yes, sure. So again, it's contextualized it against today's model. Advisers do a phenomenal job servicing the members and Australians that they do today. So that will remain. That will persist going forward. And focus on the advice gap, it needs to be at a much greater scale. And importantly, Ignition is a mission-critical platform integrated into the very core of these businesses. When we look at from that perspective, Ignition orchestrates core banking platform movements through the medium of advice across these businesses. And when you bring that level of deep integration to it, you get a lot of automation and scalability and efficiencies from that. And that fundamentally leads to where a continuum is in place that these firms can start to target a 15 to 20x uplift in advice capabilities by comparison to what they're doing today.

Terry, I'll stay with you, one quick one to finish. Where is the human adviser most valued in the advice journey? And how have you balanced adviser cost to serve with digital scale?

Sure. So the human is critical in advice. You have 2 aspects. You have the member Australian across that when you look at the scale, the 24 million people, you have challenges like low financial literacy levels, low levels of financial product understanding and so forth. And from a digital perspective, that really brings to bear decision overloads, cognitive overloads from a behavioral perspective so that they actually seek that human adviser to actually give them the confidence to take the right decisions as they transition through retirement. Likewise, the institution of the funds themselves, they have to balance conduct risk and so forth. They have to be very conscious that people are making decisions that will impact 20 or 30 years of their life. And they don't get to rework those decisions because they're at the end of life at that point in time. So the human adviser becomes critical for all complex decisions, and it's then how do you build the efficiencies around the individual.

I'm mindful of the time, Terry. I'll ask you a broad question, if I can. But Terry, I'm sure you're going to want first to give to this one. How is technology and AI changing the day-to-day role of financial advisers? And what does financial advice look like in 3 years from now?

So 2 aspects. From an Ignition perspective, we're institutional grade, so the cost to access pretty high. So AI will democratize advice. It will bring the likes of these capabilities to advisers everywhere from that perspective. The cost acquisition will drop materially. It should drop to 89% or 80% to 90% of what the cost is today. And then when you think of the price point of advice at that stage, for everybody else who's getting episodic ongoing advice type capabilities, it starts to bring that cost down to $50, $60 mark from that perspective, which is critically important. And then as everybody will be aware, it brings dynamic personalization from that perspective.

Sam or Amanda, anything you'd like to add?

I completely agree with Terry. I think lower cost to serve, improved back-office efficiency. I don't think it will replace engagement anytime soon. I think trust, accountability and emotional support are hard things to extrapolate from a keyboard.

Look, I agree, you could put capacity back into the system by getting efficiency and reducing costs. And so there's one thing that we would like AI and technology to do for us over the next 3 years is to help support that so that more Australians can get better advice and better outcomes.

All right. Thank you all. You might have the quote of the morning so far. Just looking to the room before I ask perhaps one final last one to the floor. Is the future a single unified platform or an ecosystem of connected tools? Who wants to have first go?

Happy to go. I think traditional wisdom would probably say a single solution, but actually, in practice, it's actually an ecosystem and ecosystem is so critical to this. It's recognizing that no one entity has all the answers and the interconnectivity that becomes really key. And that's the key piece where the value is really delivered.

Took the words out of my mouth because I was going to say from representing the client here, they will say one solution, please. We've got too many tech stacks are going in and out of different solutions all the time. So they would absolutely like one solution. But in reality, of course, that is an ecosystem that seamlessly looks like one solution.

That's [indiscernible] -- exactly correct.

I see it probably more as a bit of a hybrid, so a connected ecosystem with a trusted advice node in the middle. I mean, our clients are telling us they want choice and specialist tools where they add value, but they also want a single consistent advice experience for end-to-end workflow.

Very good. All right. If there's no final questions from the floor, we are coming close to time. All right. Maybe just to sort of sum up, you've heard today from Terry that high-quality advice at scale increases advice volumes and decreases the associated cost. You've heard from Sam at Iress that they have reorientated advice delivery for retirement. And you've heard from Amanda how accessing customers at scale using technology has been key. And so with that said, I opened with the comment that just 10% of Australians are currently getting advice. And what I hope that this panel session leaves you all with is that personalized advice will be accessible and affordable to 100% of Australians. Thank you all for your time, and I'll now pass back to Mark. Thank you.

Thanks, Adrian. We'll now take a quick break. For those of you online, the break will be for about 10, 15 minutes. We'll return back at 10:25. You'll have the opportunity out there to have a chat to Terry, Sam and Amanda as well. So have a quick break. Back in your seats, and we'll rejoin back in a couple of minutes. Thanks. [Break]

To give you some insights into how we have been working with our partners to unlock access to customer, retirement advice and to do that at scale. And it does feel like what you've heard this morning, you're going to hear a lot more of playing through our financial system over the next very short period. So coming back from the break, we're going to switch gears now. I'm going to invite Naomi coming up to give us an update on Fidante. Well then Anton will pick up on offshore reinsurance with Calix, and then we'll switch gears into capital settings, financial metrics and around investments. So with that, welcome, Naomi, to the stage.

Thanks, Nick. Good morning, everyone. It's great to be here with you today and to those online. I'm Naomi Cunningham, Executive General Manager Fidante, who I'm responsible for leading this Fidante business with alongside John O'Keeffe. This is my first time presenting at Challenger Investor Day. While I've recently taken on the role of leading the business, I'm not new to Fidante or Challenger having worked across different businesses in the group over the last 20 years. I've been part of Fidante's journey since the beginning, contributing to its growth across multiple roles. It's a business I'm deeply passionate about, and I feel privileged to lead it as we continue to scale and build on the strong platform. Fidante is a leading global platform that partners with talented active investment managers across equities, fixed income and alternative strategies. We currently have 16 investment managers across these asset classes that we distribute within Australia and to select international markets. It is this distribution capability that is the true strength of Fidante. It is our core competitive advantage that enables us to attract high-quality investment managers and deliver client-focused product solutions that meet the evolving needs of our investors. Fidante currently has $86 billion in funds under management. We service 90% of Australia's top 25 superannuation funds, and we cover approximately 90% of the retail financial advice market. 83% of our investment strategies are recommended or highly recommended by the Key Research Houses. Against this backdrop, it's important to recognize some of the structural changes and trends reshaping our industry. As Nick noted earlier, institutional flows have been shifting towards passive strategies, capability internalization is reducing external mandate opportunities and industry consolidation continued to increase pricing pressure, all raising the level of scale required to compete. These dynamics create near-term headwinds not unique to our business, including institutional outflows and a shift towards fewer larger mandates. However, this concentration of capital increasingly favors high-quality managers an area where Fidante and our managers are well positioned to compete and win. In the retail space, flows are concentrating on to fewer platforms and model portfolios increasing the importance of securing preferred positions. In addition, the process to be added to these models and platforms continues to increase in sophistication. Managed accounts have shifted from niche to core advice infrastructure with 80% of advisers now using them. We are very well represented across all the key consultants who are the gatekeepers to these managed accounts. Success in this environment will favor those that provide high-quality investment building blocks that have a clear role in a client's portfolio, deliver complete outcome-oriented solutions and have a distribution capability that can meet the needs of model providers and platforms. Fidante's combination of specialist investment capability with our best-in-breed distribution model and scale platform across operations and technology ensures both for Fidante and its managers can continue to capture growth opportunities as the market evolves. Active equities remain our largest component of our funds under management despite our managers facing similar headwinds to our peers. Pleasingly, our equity offering is well diversified across domestic and global strategies, spanning small to large cap. Across our affiliate network, managers have remained disciplined and true to their investment processes, an important strength in periods of disruption. We believe as seen in prior cycles that maintaining this discipline is critical to long-term performance and sustainability. During these periods, the strength of the Fidante model becomes particularly evident. Through our partnership approach, we provide our managers with operational and distribution support and long-term alignment allowing them to stay focused on the investment outcomes while we support them through the cycle. Fixed income is performing strongly with healthy flows, particularly in the private credit capabilities. Fidante distributes the challenger internal private credit capability, which is market leading with strong track records, scale, deep origination capability and attract strong investor demand. Fidante set a strategy many years ago to build out a diversified suite of alternative offerings. Most recently, we successfully onboarded 2 high-quality alternative managers in system capital and footprint. And today, alternatives make up 17% of our funds under management. We continue to see strong demand for alternative strategies with private markets, the fastest-growing segment in global funds management and liquid oils also seeing renewed interest, and we're excited to grow our exposure to these strategies. Our focus with Fidante is to build out our solution offering to clients by sourcing high-quality investment capability and bringing it to market. We bring best-of-class investment talent either via a build, partner or buy approach to accelerate access to demand in these asset classes. We are looking at several compelling opportunities in the liquid and semi-liquid alternative strategies, and we have some exciting new initiatives with full prem, which will unlock additional product opportunities. In addition, with technology, data and AI reshaping investment, distribution and operations across asset management. We are also focused on investing in the platform to ensure scalability for the long term. Organizations that cannot modernize their platforms, product structures and analytics is falling behind on efficiency, insight and client satisfaction. As such, one of our key strategic priorities is to complete the transition to State Street Charles River and Alpha platform, providing Fidante and its managers access to advanced technology and capability. Looking ahead, we will evolve the platform in line with where the market is going. This means expanding our alternative offering, continuing to preserve and strengthen our distribution capability ensuring we remain aligned to the changing dynamics of platforms, model portfolios and institutional channels. and investing in our operational platform so that we scale efficiently, improve insight and deliver consistently high quality client experiences. While we are not immune to cyclical pressures, the fundamentals of the Fidante business is strong, we have a diversified and growing product set, a highly regarded network of affiliate managers and a distribution capability that is central to our competitive positioning. Importantly, we are part of the Challenger group contributing capital-light fee-based earnings that supports the group's return on equity and long-term growth. We are confident that Fidante is well positioned not just to navigate the current environment, but to grow and succeed over the long term. And with that, I'll now hand to Anton, who will be presenting on Challenger's offshore reinsurance platform opportunity. Thank you.

Thanks, Naomi. Good morning, everyone. My name is Anton Kapel, Chief Executive Insurance. I'm excited to be here today to share with you an update on our offshore reinsurance ambitions, which the team has been working on for the last couple of years. As you would be aware, we've had a very successful partnership with MS Primary since 2016. More recently, we've been working on ways to expand this partnership and in doing so, create a platform for further growth in offshore reinsurance business through a dedicated reinsurance entity based in Bermuda called Calix Re. This is a strategically important initiative for Challenger. It builds on capabilities we already have and opens up the possibility of extending our reach into Asian reinsurance markets in a way that is difficult to achieve from Australia alone. This story starts with MS Primary. We have a successful and long-standing reinsurance partnership with MS Primary that spans a decade. Over that period, this partnership has generated meaningful offshore annuity volumes across Australian dollar, U.S. dollar and Japanese yen products with over $3 billion of in-force liabilities at the end of March. This relationship has been commercially attractive for both parties, underpinned by a strong working relationship and alignment between the 2 organizations. Importantly, the partnership has demonstrated changes capability to originate, structure and manage long-dated insurance liabilities from our foreign jurisdiction across multiple currencies. We've been working to establish Calix Re in order to support continued growth from this partnership and to open up additional growth opportunities with other partners at a time when accounting capital and demographic changes are driving increased demand from Asian insurers for reinsurance support. Calix Re is a Bermuda-based reinsurance company licensed as a class long-term insurer, the category designed for large commercial life and annuity reinsurers. This license gives Challenger a credible presence in one of the world's leading global reinsurance hubs, Bermuda. You may be thinking why Bermuda. We do investigate numerous jurisdictions that we ultimately selected Bermuda for a couple of reasons. Firstly, we already have experience operating in Bermuda with a subsidiary of CLC based there to facilitate the existing MSP reinsurance. But more importantly, Bermuda is a significant global reinsurance hub, with a large number of global insurance -- reinsurance base there, a huge volume of global reinsurance business flowing into the Ireland, a sound and well get regulatory framework, noting that Bermuda was the first jurisdiction outside Europe to obtain Solvency II equivalents and it has an established market infrastructure. It's estimated that around 1/3 of the world's risk-bearing life reinsurance capital is based in Bermuda. The Bermuda's long-term reinsurance sector, managing approximately USD 1.5 trillion of life and annuity assets. Japan is the second largest source of ceded liabilities for life insurers in Bermuda after the U.S., highlighting the growing importance of Asian markets to the Bermudan reinsurance industry. In summary, Bermuda is a natural jurisdiction to establish a reinsurance platform and it's much more natural for any life insurer to look to partner with a Bermuda-based reinsurer rather than an Australian-based insurer. We've made a lot of progress in setting up Calix Re. We are registered, and we've recently obtained an A.M. Best A- credit rating, which is an important foundation for building confidence with prospective counterparties. From an operating perspective, Calix Re has been deliberately designed to be resource-light and scalable. It leverages Challenges existing infrastructure, systems, governance and deep insurance expertise rather than duplicating them. We have a plan that will see our presence in Bermuda grow as Calix Re scales over time. The platform is supported by best-in-class third-party service providers across investment management, actuarial risk and administration. Calix Re's investment portfolio will be managed by the Challenger investment team leveraging third-party asset management partners to expand the scope of Calix Re's invest management capabilities, particularly for offshore private assets. Over the near term, we expect to announce some important asset management arrangements with leading global alternative asset managers to support the platform. We've deliberately designed Calix Re as a robust scalable reinsurance platform allowing us to further grow the MS Primary relationship and pursue new partnerships while keeping incremental group cost control as the platform scales. We also improved the Challenger Group's earnings mix and quality, supporting more diversified and higher quality earnings across markets, products and counterparties, including capital-light fee income. In summary, this is a huge opportunity for Challenger. The builds on capabilities we already have further diversifying the business and supporting the long-term growth of the group. Thank you. And now Alex will join me to talk about capital settings and financial metrics.

Good morning, everyone, and thank you, again, very much for joining us. I'm Alex Bell, the Challenger Group CFO and next up Anton and I will focus on the single most important regulatory change to impact the financial profile of our business in decades, how it changes our capital position. At its heart, Challenger is a return on capital business. The primary driver of shareholder value is how effectively we deploy capital to generate earnings. So let's take a step back and remind everyone of the regulatory changes that come into effect on the 1st of July 2026, creating a structural inflection point for our business. Aspers new capital settings for longevity products are a critical step towards creating a more innovative retirement income market for retirees. Importantly though, given our audience today, they also create meaningful shareholder benefits by providing challenger with improved capital resilience, strategic optionality from excess capital and a platform for growth. For a long time, Challenger has operated with a capital framework that was very procyclical in nature. That meant that when markets were strong, things looked fine. But when markets got stressed, the underlying economic effects were exacerbated by the capital framework. This forced us to take actions to address the apparent capital stress, actions we didn't want to take and at exactly the wrong time. Selling assets and derisking to protect the reported capital position. For those of you who followed or were invested in Challenger during COVID, you'll remember all too well how this played out. We did indeed protect the reported capital position as we have to do. But in doing so, we had to compromise on shareholder value. The opportunity now is to not have to make those trade-offs again. Anton will now step us through the implications of what this might look like in practice.

Thanks, Alex. Okay. Let's get into some numbers. On day 1 of the new capital standards, just 36 days from now, our pro forma PCA ratio will increase by approximately 14 points. This is primarily due to a reduction in the PCA, the minimum amount of required capital. Put simply, the denominator of the ratio get smaller. Getting a bit more technical. This is a result of a lower asset risk charge driven by an increase in the liability offset within the capital -- in the credit spread stress charge component of the PCA. This increase in the PCA is equivalent to excess CET1 capital of approximately $300 million before considering any changes to the asset mix. As a result of a lower PCA, our ability to effectively utilize additional Tier 1 capital reduces. And so yesterday, we were able to redeem the Challenger's capital notes 31 instrument that we had on foot. With this redemption, our pro forma PCA ratio based on the 31 March 2026 balance sheet, reduces by approximately 13 points and gives us a much more optimal capital mix. On this slide, we're showing fewer pro forma outcomes. While we still need to complete internal approval processes around our strengthened risk appetite settings, given the new standards, we expect that our new target capital position will be well below the pro forma 1.52 outcome you see on this slide. Reflecting this, in February, we announced an initial $150 million buyback, which is progressing well. Subject to the relevant internal and regulatory approval processes, we expect to be in a position to return meaningfully more capital to shareholders in the near term in the order of a further $300 million. Importantly, though, capital returns are not the end game, a significantly improved capital resilience is the real benefit. Next, I'll take you through 2 examples, stress events. A sudden shock style out on COVID, which is an update to the example we shared back in November and a prolonged 12-month stress event modeled on the GSA. Okay. Let's take you back to a COVID style stress scenario, one that is short and sharp. Under the current standards, and starting with the PCA ratio of 1.38. The stress event would cause the ratio to fall by 32 points, requiring immediate derisking actions to protect the reported capital position. Under the new standards, the simplicity, we've kept the balance sheet the same. So we start with a PCA ratio of 1.52%. The important point to note is not the absolute levels of PCA ratio in this example, but rather the change in the PCA ratio as a result of the stress event. As you can see, under the new standards, it reduces by just 4 points with no derisking actions required. This is because the liability offset increases materially during this stressed event. You can see in the table that there is a $1 billion liability benefit versus only $0.1 billion previously. The reported capital position under the new standards now reflects the underlying economics much more closely. Now let's look at the GSA sales for scenario, one that is deep and prolonged. Under the current standards, again, starting with the PCA ratio of 1.38, this stress event would cause the PCA ratio to fall by 51 points, requiring value-disruptive derisking actions. Under the new standards, again, simplifying by assuming the same starting balance sheet, the PCA ratio starts at 1.52. Under this stress event, the PCA ratio would reduce by 26 points if no actions were taken over the 12-month stress event period. This is half of the impact that would be experienced under the current capital standards. Depending on where the capital position is when the stress event starts, we could very well need to take some management action under this type of scenario. However, the new capital standards create opportunities that did not exist under the old standards. Management will be able to take proactive portfolio action to create value, taking advantage of widening spreads by switching out of alternative assets into high-quality fixed income. When you remove forced behavior from balance sheet management, you change how the business operates through the cycle. Under a stress scenario in the future, and we might very well be at the doorsteps of another one now. We are not for sellers. We are not locking in losses or giving up future upside. Instead, we have choices and in many cases, very good ones. On the next slide, I'll dive a bit deeper into this dynamic. In a prolonged stress, spreads widen, and this is when real value opportunities show up. Under the new framework, we can rotate the portfolio, manage capital actively and improve the capital position, and we can do this without significant loss of returns. And depending on the scenario, we could even increase returns. The example here illustrates a rotation of $1.2 billion out of absolute return funds and into high-quality credit. During this scenario, we can generate a largely earnings-neutral outcome while releasing $300 million of PCA. I will now hand back to Alex to take us through the implications for our financial flywheel.

Thanks, Anton. So that provided some practical insight into how the new standards remove a fundamental and structural constraints on our business. Previously, the balance sheet worked against us in a stress event, and now it will work with us. The combination of stronger capital resilience, reduced volatility and clearer earnings drivers transforms the financial profile of Challenger. Historically, looking at the left-hand side of this slide, the flywheel was capital consuming and growth constrained. After ensuring we deliver a compelling shareholder dividend and funded some modest growth there was really precious little left to go around. This meant that in times of high growth, we have to raise fresh equity to support that book growth. But going forward, the flywheel becomes capital generating and self-reinforcing. Larger, more stable spread-based earnings are supplemented with capital-light fee income giving us the springboard to support unconstrained organic book growth, whilst also generating free cash flow. Excitingly, this change comes at a time when our growth outlook is more positive than ever before. As we enter a new era of the business, we will start to talk about our success in clear building blocks of shareholder value. This will mean reframing our management reporting P&L into spread income, fee income, and investment gains and losses. We will remove all assumption-based normalized accruals for income and capital growth that are embedded in the current framework. As we shift to our balance sheet with a higher proportion of fixed income, the contribution from stable spread earnings will also increase. We will report the full year FY '26 results in August under the existing MCOE basis for the last time and transition to the new framework with enhanced transparency of disclosures about the sources of our high-quality earnings. Importantly, earnings per share will remain the fundamental measure of shareholder success with ROE and importance through the cycle hurdle. This slide gives a first look at the new categorization of our group P&L. It now clearly shows the contribution from spread-based income from fixed income and fixed income-like assets and how this is supplemented by fee income. We will show the total return on our growth assets like property and absolute return funds in aligned labeled investment gains and losses. This will measure our investment performance in aggregate in these asset classes. As the expected volatility of our returns falls, our CPM derived beta also falls. Post-COVID, you can see how this spikes up materially versus peers, but started to return to a more comparable though still elevated level in the years that followed as we stabilize the balance sheet and rotated out of our equity correlated exposures. The announcement of APRA's new capital standards triggered another step change, and we expect to see further normalization as these changes are implemented and better understood. A lower adjusted beta reduces our cost of capital and in turn, reduces our required return on capital threshold. As we become more capital efficient, cycling out of lower returning and capital-intensive assets like property, the balance sheet will expect to be able to generate higher returns on the capital we retain. So where does this leave the shareholder value proposition. Because we now have real flexibility on capital, the shareholder proposition is more compelling than ever. The downside risk is now materially reduced. We can demonstrate higher quality of earnings with capital support spread income while growing capital-light fee business. And we have real capital optionality, including capital allocation flexibility with the ability to respond with a spring-loaded balance sheet with available dry powder. The new capital standards take a structural weakness and turn it into a competitive advantage. And I'll now hand over to Damian Graham for more on our investment excellence and our balance sheet strategy.

Thanks, Alex, and thanks, everyone. It's great to join you this morning for Challenger's Investor Day and get the opportunity to talk to you about investment excellence. My name is Damian Graham, and I joined in January of this year in the new role of Group CIO or Chief Investment Officer. Prior to Challenger, I worked in Investment Management and Aware Super for the last 3 decades or so. most recently as the CIO for Aware Super for a little more than a decade, where I had the privilege of being able to manage the super of more than 1.3 million members across about $200 million of assets invested very broadly around the world. In joining Challenger, I'm very pleased to continue to build on the strong foundations of Challenger's investment capabilities, and to ensure that we can deliver the best risk-adjusted returns. This is going to be different in future under the new capital standards as Alex has just touched on, but also as credit markets continue to develop. Our philosophy will be to further build internally to deliver targeted return streams where possible, but also to partner with external organizations where that is preferred. As an example of this, the recent relationship we've established with Charter Hall for our real estate assets is one where that will help us to reposition our portfolio. As the amount of our liabilities continues to grow, will continue to increase asset origination across the fixed income spectrum to support growth at the best relative value. And this relative value will be considered across the whole of Challenger's balance sheet to ensure that shareholder value can be maximized. We'll do this through a combination of earnings from spread on assets, but also fee revenue for managing assets for other sources of funds. I mentioned earlier the strong foundations we have in the challenger investment function. This reflects more than 40 years of managing Challenger's balance sheet, and that's evolved more recently over the last 20 years investing in fixed income markets as one of the first drive growth in local credit markets. Across our fixed income team, we have deep expertise in areas such as asset-backed markets, corporate lending, the whole loans market and real estate lending. As the chart says, we have more than 100 people in our investment team with real expertise across these sectors. Our portfolio management team has more than 24 years on average of experience, undertaking investments across these sectors. We also pride ourselves on strong governance and risk management, and this includes across the credit risk team that reports the Chief Risk Officer and is certainly instrumental in ensuring we fully consider the risks involved in assets we hold. Part of my role has been to bring together the teams of the 2 investment functions. And to do this, we've identified the key functions that will be critical in the future as we evolve our business. The slide summarizes leased with the creation of a number of centers of excellence that mean that we can fully leverage these across growing client bases and different sources of funding such as Calix as Alex and also Anton mentioned, or new third-party clients. One new stand-alone capability that is being built on is the capital markets function. And this ensures that we're able to maximize value from the structuring and financing needs, particularly through securitized transactions such as the recent Bank of Queensland whole loan deal. Before I move on to give some more information around that transaction, I do want to talk about the directional change for the investment portfolio that will be driven through the APRA capital standards. If we think about the from and to for the portfolio, we do expect that we'll be increasing the percentage of assets underpinning liabilities invested in fixed income. Now this increase will be funded during FY '27 over the next 12 months by reducing growth assets such as absolute return funds or property although the timing of this change will be driven by both the growth of liabilities as well as the opportunity to rebalance the portfolio to maximize value. Now the benefit of this is underlined by the opportunity to grow the exposure to high returning fixed income, that is highly capital efficient, particularly under the new capital standards. If we look across the investment universe perspective, we start with very strong foundations across many parts of the fixed income spectrum, both public and private. The light green boxes highlight where are accessing that today and expect to continue to do so in the future. If we look at our fixed income portfolio, approximately 75% sits in the investment grade area and the majority, excuse me, are publicly rated. We see a strong opportunity to keep building into the areas included in the dashed area, leveraging our deep expertise in asset-backed markets. I also wanted to touch on some thoughts on private credit, given how topical it is and how it's been growing so strongly in the market globally over the last few years. We've been a long-term participant kind of built out practices and processes to ensure we operate in a very robust way. We believe the strong governance is critical to delivering outcomes for our investors. As noted on the slide, we utilize valuation practices that leverage external inputs and also aligned to liquidity requirements. This ensures that assets are fully -- fairly value, excuse me, when we invest to redeem for clients. As mentioned earlier, we also have an independent credit risk team to bring real line to independents to each transaction, and that underpins the rigor of our process. Since beginning, I've been very impressed with the quality of this team and the insights they bring to the process. Another issue that we hear about the markets very actively is conflicts of interest. And it's such an important issue to manage properly. We have in place very clear frameworks to manage any potential real conflicts that may arise. At the end of the day, the key is to ensure that the interests of our policyholders and our clients are prioritizing in any conflict management. Now the next slide provides some thoughts on concepts that underpin our interest in having a strong capability on the whole loans market and it's really a good case study for why Challenger has appetite to go with Bank of Queensland and other ADIs. Now this market is relatively less developed in Australia compared to overseas, but we see this likely to change in the near term, particularly as banks consider their capital positioning. The assets backing whole loan transactions tend to be diversified and are typically originated by high-quality lenders, again, often ADIs. The transaction sizes can be material and this will assist with us being able to support the expected growth in our liabilities. Importantly, the types of assets that we can access through these transactions are really efficient from a capital intensity perspective. Also valuable as the returns are driven by premium, including illiquidity and structuring as opposed to just credit risk. We're also able to utilize our in-house loan servicing team to ensure the loans are managed appropriately. Now digging into this transaction, we can see the deals such as BOQ, allows Challenger to access significant existing forward flows as part of the transactions best suited to back annuities. As the slide highlights, the mezzanine tranches offer strong risk and capital intensity adjusted terms. We can also retain or sell lower rated tranches and the NIM from the transaction. whilst the higher credit quality are financed separately, and so don't impact Challenger's capital base. This slide also highlights why this area is attractive. When we look at the historical outcomes across asset-backed corporate and bank debt markets, we can see that there's been additional complexity in liquidity premium provided and has provided additional returns as shown on the left-hand side of the chart. On the right-hand side of the chart, we can see the ratio of rating upgrades to downgrades for ABS is favorable compared to corporates, delivering strong risk-adjusted outcomes. Now each sector does play an important part in our diversified portfolio, but it does highlight the benefit of this area across our total portfolio. I also wanted to just give a quick update on the lift notes. So I'm sure all are aware of the challenge lift notes being listed floating-rate notes came to market in September 2025. And this was brought to market in response to the wind down of the hybrid issuance, giving us a very significant tail and demand tailwind as noted on the slide there with expected to be $5 billion of annual demand for this type of security. Our expectation is that we'll bring a series of notes to market in the coming years, and that will grow through a multibillion dollar size of issuance, generating spread and fee revenue for Challenger. And we're very proud of this being a first to market and have remained -- it's remained very resilient even with the conversation in the market around private credit, where these securities are trading over $99. They are really prime example of building adjacent products to leverage off the strength of our credit investing, and our focus remains on strong governance and risk management as well as ensuring we have significant liquidity in these securities to meet any clients. And finally, I just wanted to give some thoughts on what we're seeing and expecting for the markets. And importantly, I'll also touch on how we are positioned. So not too contentiously, I believe, we do expect that inflation and also interest rates are likely to remain higher than preferred for some time. We are well positioned against these issues in the near term. And with higher rates, we expect to be able to provide higher annuity rates for our clients. Secondarily, volatility and slower growth also appear likely with markets. We've seen them fairly well behaved in this backdrop with the recent geopolitical events, but we have seen some spikes in volatility. Now as Alex mentioned and Anton as well, under the new capital standards, our portfolio will be more resilient to market weakness as we don't need to react in a procyclical way, as we've had to historically. In that environment, though, where we do see credit spreads and whilst they remain historically pretty low, if we do start to see an opportunity there, we are well placed from a liquidity perspective and also a portfolio perspective to take advantage of those opportunities. We're also strongly positioned in credit markets from the relationships we have and our background in being a good counterparty. So we do believe we'll be able to access attractive deals when they come to market, where we see lower liquidity, but also demand for deals. So in summary, whilst markets are always uncertain, we do believe we're well positioned, and we have optionality in the potential environment moving forward. So with that, I'd like to thank you, but also I look forward to answering any questions may come in Q&A. And I'll hand back to Nick.

Well, thank you, Damian. And my colleagues after the break certainly sprinted through their session. So it's brought us to the Q&A early. But before we get there, I do hope that out of today's session, what we want to achieve is 2 sides of it. One, to give you some real color as to how -- what we've spoken about these last couple of years of how you unlock demand for guaranteed income, how this retirement story is going to play out. What you've seen in this learning session is and hearing it from those participants that are involved in it is it's happening. We are -- we are building that connective tissue between the accumulation and the detumulation system in this country. The acknowledgment, the retirement is fundamentally different. We have passed the precipice on that. And so it means for our business, where we are positioned from a brand strength from a reputation where our distribution teams are positioned across the market every day with advisers, training advisers, with institutions delivering on these partnerships that we've announced. We are in a really incredible position as a business. And this is just going to keep accelerating because as I made the comment, we are now well past the inflection point. In the second half, we've run a dual strategy. We've wanted to unlock this retirement opportunity but we recognize that we needed to resolve the constraints in our business, largely around our balance sheet, the life company balance sheet. So with the final standards coming out from APRA in March, you've heard Alex and I speak a number of times, an expectation will come between good and great. And hopefully, what you heard from animals there is that we've landed great for our business. We know what matters to accelerate growth, and that is the ability to deliver really high-quality oil, the best risk-adjusted return per unit of capital that we deploy every day. The work that Damian has kicked off in this last 6 months to bring together what are already great investment teams, but to get ourselves tooled up for the growth that we see in the future is really, really important. That engine that we have, the investment engine we have has utility beyond just the Challenger Life company balance sheet. Anton talked about Calix, we're going to get my enunciation of that right. Calix, which allows us to leverage a relationship that has just continued to strengthen with MSP. And so that is a really great opportunity. But we've always recognized that our core products are part of the story, product innovation, whether it be guaranteed and nonguaranteed. There's a whole lot of stuff we're doing and we want to do in the future. So the conversation around list notes, this program is going to provide a really powerful platform for us as we look ahead. But there are emerging parts of the market, I spoke to the intergenerational wealth opportunity that just gets larger and larger in this decade head Insurance companies are incredibly well positioned to innovate around that. At the same time, we recognize that we needed to unlock our own organizational capacity by -- and I think to last your comments about sending letters for reinvestment of term. I've just gone through my own reinvestment of term. I end up having go to the desk of the contact center to square mine way. But the process is what it is. That is the tools that we've had up until now. The way we're retooling the business is what you would expect of a best-in-class financial services firm, whether it be customers coming to us direct advisers coming to us direct or whether it be integrated into platform or in partnership with super funds the ability to take the ability to have a technology platform that can be scaled across that is really important, and we are working around the clock to get that into market as soon as possible. So finally, let me just thank all the team at Challenger, there'll be a whole lot of folks around the country, I'm not sure listening in. And it's because of the efforts of our team who are so passionate about our business, our purpose and the differences that we make to customers and who want to see this story just strengthen and strengthen from here. So that is my final comment, and I'm just going to invite Alex and Anton and Damian to join me, and we can shift to Q&A and take it from there.

[Operator Instructions] Let's take the first question, all the way from Kieren at the back there.

Kieren Chidgey, UBS. Anton, I might pick on you first in terms of the reinsurance Calix Re, can you just give us a feeling for the timing of scaling up potential partnerships, reinsurance partnerships? And also within a group context, how much capital you'd be willing to put behind those sort of reinsurance relationships?

Thanks, Kieren. Look, our focus right at the moment is about establishing the business and moving the existing MSP business across, and that will probably take most of this calendar year to fully complete. So moving into calendar year '27, we will hopefully be sort of fully established, fully set up and in a position to start to look to pursue other partnership opportunities. In terms of size, look, as Alex alluded to, we have -- we find ourselves in a position where the existing business should be throwing off capital for the foreseeable future, which gives us a great opportunity to deploy that capital into opportunities that we can access through Calix Re. In terms of exactly where it lands, look, we'll have to see how the market evolves, how our pricing compares competitively, but we -- the opportunity is very large. And we've been up to Asia on a couple of marketing trips. We do, one, know that the opportunity is genuinely there. And two, we know that we have sort of the right to win. Insurers are looking for traditional insurer-backed reinsurance vehicles. And so we will meet the need for the market, and we do expect to win our share.

I might just add that from a business case perspective, we were really comfortable that establishing Calix Re made sense just with the MS Primary business stand-alone. So moving the existing business we have today as well as being able to reinsure some additional products with them. So everything else above that is kind of upside to that business case.

And sort of Alex, it's a good segue into my second question. So the growth opportunity in Calix Re, is that one of the factors that's sort of preventing you being more forthright with capital management plans over the medium term and giving us a clearer view under these new life capital standards, which have largely been set since November last year haven't changed a lot. I would think we've had plenty of time now to absorb that and have a view around the asset mix and what you're likely to do, say, over a 2-year view, both in terms of life assets and capital management off the back of them.

Yes. Look, thanks for the question. I guess starting with your first point, Calix doesn't factor into any of our sort of CLC management actions for the foreseeable future. So that's not presenting a constraint at all. These standards from APRA were finalized only in March. We had good line of sight of them before then, but we're really only set in stone from March. So you'll appreciate that we've had to go through a process internally first to think about our own risk appetite and how we might strengthen that to position us optimally going forward. And both the approval of that new risk appetite and the approval of our FY '27 budget and 3-year plan is following its usual cycle. So that is only being tabled with the Board during June and will then be signed off. So we've done as much as we can today to give everybody a sense of what that will look like, but obviously is subject to that Board approval. And so maybe just as a reminder, everything we've got packaged up together. There's already AUD 150 million buyback on foot. It will be obviously subject to APRA approval, but expanding that buyback by another AUD 300 million is the sort of order of magnitude that we're looking at today. So that will be AUD 450 million on foot. And then we've got AUD 385 million of AT1 paid back yesterday. So that's kind of all day 1. The day 2 is more incremental, and it does -- it is influenced by the speed of liabilities that we can originate and therefore, the speed at which the asset allocation can change. But one way to think about it is as we step into FY '27, almost every dollar of new business that we write goes into fixed income rather than anything else. And so you start to remix the portfolio just by means of writing new business before you actually have to sell any growth assets.

Right. And final question, just the balance between ROE and growth. Obviously, lower capital intensity, your ROE should improve. Will we see that? Or will you recycle any headroom into sort of trying to write more volume?

Yes, it's a great question. So I think a couple of things to say about ROE. Our principle around ROE hasn't changed. So on a like-for-like basis, our kind of ROE target will be broadly the same. But we've spoken about today steps to increase our -- or strengthen, I should say, our risk appetite. Now you'll remember that the last 2 times that we strengthened our risk appetite, that came with a reduction in ROE. That won't be the case this time. So we'll be strengthening our risk appetite but retaining the level of ROE that we're targeting. And that's because we've got a stronger balance sheet than ever before. And over time, there's changes in asset allocation. So anything that comes out of property, which at the half year, we showed as currently being a lower ROE-generating asset than some of our other asset classes, the extent to which you can cycle out of that into other asset classes will increase the ROE that we can actually achieve.

Freya Kong from Bank of America. Can I just follow up on Calix Re? Do you find that not having a Bermudian platform has been a constraint to the volumes in the offshore reinsurance business? And setting that up, would that open you up to a step change in growth in new business quite immediately?

Do you want me to just make a few comments on that? So if you think about the long -- the near decade, near 10-year relationship we've had with MSP, I mean, part of the mission over the last 3 or 4 years is to strengthen that relationship and to explore ways to broaden that partnership. So we do reinsurance with them. We also do investment management across property and our domestic fixed income team. On the reinsurance, we've expanded the currency set that we reinsure with them and the product type we reinsure. What we observed over the last couple of years is the opportunity to reinsure other products that we can't do today from Australia with MSP. So significant categories in the Japanese market. And what we found in the discussions with MSP over this last couple of years is a real appetite to work in deep partnership with Challenger as a key reinsurer. So we're not just a panel reinsurer, and that has allowed us to work with them on a business case and the formation of Calix, including having one of the MSP representatives in Bermuda with Anton only several months ago, meeting with the regulator there. So it's -- that is the beachhead for us to establish Anton and the team and Anton and myself over the last couple of years have done trips around North Asia. Anton made comment around changes to accounting standards, international capital standards, desire to use insurance-backed reinsurance, which is as opposed to private equity-backed reinsurance. And that positioned us really well in this market. But we do all of this at the same time by saying we want to sort of crawl, walk, run on the opportunity, screw it away with MSP, business case works on that. There are clearly other discussions with them and also other counterparties that we can take at the right time to opportunities to -- for new reinsurance partnerships.

Okay. And then just help me understand if there would be any capital benefits for the Life CLC company if you move the Japanese business to Calix Re? And will you start reporting a BMA solvency ratio?

So this is a fantastic question for Anton.

On day 1, the capital position will be pretty similar. So no sort of significant capital benefit on day 1 from moving the business across. What is true, though, is in terms of a platform to scale as the business grows, it will be less capital intensive in Bermuda than it would have been scaling in Australia even with the new capital standards. So the regime in Bermuda is still more tailored for the types of business that we're writing.

Andrew Buncombe here from Macquarie. Just a couple from me, please, and maybe that's a good segue to my first question. You're obviously listed in Australia, you're domiciled in Australia. How does APRA feel about you writing more international business under the capital standards?

Andrew, I might start with that one. You can imagine that there's been very close dialogue with the regulator. One of the points that we've made clear from the outset is that the reinsurance entity in Bermuda would be for international or offshore policyholders. So if you think about MSP, clearly, Japanese policyholders, they're an institutional client. As an institution, you don't just write reinsurance on your own terms. You write it particularly around the collateral with -- in partnership and agreement with them around it. So this is not a strategy by Challenger to reinsure Australian policyholders. And if you think about what success looks like here in x number of years, you've now got a more diversified business. They are remote from each other. They're remote from each other, but you've got a business that should be stronger through that diversification moreover. But Anton, did you want to add anything?

And then my second one was on the investment income. Have you started to remix the asset investment portfolio in advance of the new capital requirements?

Yes. Thanks, Andrew. I might give Damian a chance on that.

Yes. I mean we have slightly, but not holistically. So there's been a little bit of trimming in some of the growth assets. Again, I touched on, and I think Alex may have touched on it as well that we do have the portfolio broadly fixed income today, about 3/4 or so. And then we have some diversifying assets. Property is one asset that has typically been seen as lower returning more recently. But we also have some more highly liquid and less correlated assets around the asset return area of the markets. And so we started to trim a little bit in that area. I think the question before is relevant, though, just thinking about that balance of ROE and thinking about how to optimize the capital as well. So -- but we'll go through FY '27 and look to rebalance the portfolio.

And then the final question, maybe just for Alex. A lot of your global peers under the new accounting standards or a couple of years old now, have actually taken the view of giving guidance on a movement in CSM basis as opposed to how you're talking about it now. As you're remixing the investment portfolio towards more fixed income, your guidance metrics by definition, become more volatile. So why have you taken the choice to give guidance under the new structure compared to the global standards? Thanks.

Thanks, Andrew. So when we thought about changes to the framework, I guess there's been a number of considerations. The first thing to say is there's definitely no perfect management reporting framework. Probably the reason we've stuck with NCOE for as long as we have is for that exact reason, sort of all changes are not perfect. When we've looked at peers, we've thought about other large annuity writers rather than just insurers generally. And this moves us quite a lot more closely to how they think about it. So thinking about the sort of underlying spread that you can return and then other investment gains and losses that you might make on non-spread-related assets. So Athene is pretty similar in some of the other big annuity writers. So I think that moves us more aligned with them. In terms of your volatility comment, I guess one of the things we've sought to address is that over the years, the normalized assumptions create a lot of noise in our results, not noise in a -- I mean, they create stability in the result, but noise in the explanation, right? And we don't -- I would rather be standing up talking about our actual performance than explaining differences to normalized assumptions, which is where I feel we've been at for the last few years. So being really transparent about what those building blocks are. And it will mean that some of the guidance we provide is in a year and some of the guidance will need to be more sort of 3- to 5-year horizons, which again is for a business that is long term in nature like ours will be suitable.

Just 3 questions, if I may. So just a follow-up for Calix Re first. So in terms of, you said that the conversations are in North Asia primarily, is it really Japan? And what's -- Dai-ichi is obviously a partner, but we will be expecting you guys to work with. Is this process finalizing conditional before they would consider you guys? Or can you just talk us through realistically outside of your main partners, who can we expect in which countries?

Well, let me -- there's a few parts to that, Laf. So when we say about North Asia, I think because in Japan, people know Challenger, and they know us for the relationship and the stability, the ability to work on new product development with MSP, and that market is just really large. So you've got new business market in Japan, but you've also got the emergence of a PRT market in Japan as bond yields have backed up. The funding ratios on corporate plans in Japan have improved a lot. So on a longer-term basis, is that an opportunity? Absolutely. So we visited other North Asians. So we have been into Korea, which is getting fungible currency basis in time, and that's been an inhibitor to reinsurance there. And we've spent time in Hong Kong and Singapore, so not quite North Asia there, came back down. So we do think there are opportunities, but we're sort of just wrestling it one part at a time, and that's why we sort of talk about the focus on Japan. I think, look, in context to the question on Dai-ichi, clearly, we'd love to partner with groups like Dai-ichi or Dai-ichi Life or Frontier there to support them on reinsurance. And Damian and Anton were in Tokyo a couple of weeks ago, spending time with counterparties there and at MSP, at Dai-ichi and MSP. So we'd certainly look to explore that.

Okay. Can I move on to what seems like a bit of a change in your investment approach or whether it was Pepper Money and that didn't really work, but be it Bank of Queensland, it's kind of a different approach to what we've seen historically with Challenger. So can you just talk to what's behind that change in strategy? And can we expect more of it?

I'm happy to jump in. And again, I can't -- having only been here for a few months, give full background on Pepper, but -- when I touched on from the Bank of Queensland perspective, why we believe it's attractive for what we're trying to underpin our annuities with. So I'm not sure I agree fully, but it's a big departure from where we believe the strategy should be going forward and obviously what it's trying to leverage in the past because if you step back and think about what we're really good at and what we have built over the last couple of decades, it's really strong understanding of credit markets in Australia. Obviously, we've done a lot of asset-backed, and that's a strong part of our portfolio today. And so the extension of that into the whole loan type transactions is, I think, a fairly natural way of extending what our sort of core competencies are. And those types of transactions give us a little bit more primacy, a little bit more security around what type of assets we can get to underpin the liabilities. We know how attractive they are to us from a risk return perspective on a capital-adjusted basis. So again, very, very aligned to what we believe our sort of core focus should be for the portfolio. I think we've all touched on the view that we would expect to have a slightly higher allocation to fixed income in the future. And so as we expect strong growth to occur, we need to obviously be underpin that by growing our sort of origination engine or activity set as well. And so very aligned to what I think our core strategy is.

So it sounds like the yes, you probably will move more towards origination. Just last question, I know that Fidante has touched on as well, and I'm not sure if we can sort of go into that. But really, it's been a bit of a flop over the last 5, 10 years. And we've had probably 5 years ago, there was an investment with SimCorp, and we're not sure that's kind of fizzled out. I'm not sure what exactly happened with that joint platform and offering. Yes, I understand that there's been strategic issue -- sorry, macro mergers and the like occurring. But if you look at a lot of your peers, whether it's PNI, they're in very healthy net inflows and they're a staking business or MA Financial, Regal L1, all in very positive net inflows despite and notwithstanding those background issues. And so what are you guys getting wrong in the Fidante business? And what will fix it? And have you moved away from just a staking business to now also being distribution? And like what's core to your strategy?

Yes. Thanks, Laf. Yes, so some -- a couple of comments there. If you think about where Fidante has grown from, I mean, we've done that business with not more than about AUD 55 million of capital. What's on the balance sheet? Yes. So most of the dollars -- near every dollar in that business has been raised organically. And it's been raised off the back of partnering with some of these investment talent that you've seen, that Naomi showed up there. As the years progress, a couple of things change. One is there are certain asset classes that become more attractive where you don't really have a right to run that out of Australia. Putting a 5-person global credit team in Sydney is probably not going to be that credible. Partnering with global credit providers, as you've seen us do in the years past is credible. So we broadened out that strategy from build to partner. So we've never had a big buy strategy until the more recent Fulcrum transaction where we have bought nearly 1/4 of the business, 22% of the business and an established manager in London. That looks like it's going to work extremely well. So bringing back to what was put into the business and you think about the economics that, that thing is thrown off, it's been really material. To your point of SimCorp, just to make sure you understand evolution last 4 years, I stood in front of Investor Day in '22 when we talked about leveraging our operating platform. And that was our 160-person in-house ops team that was using the SimCorp Dimension technology as the base technology. If things change, as we got closer to that business and we created it, the capital that we were going to have to put into it to create something that was globally competitive absolutely made no sense. So the model that you have with a group like State Street, where you're bringing together custody and end-to-end Alpha 1 execution to the portfolio management tools, the whole piece, that is what we brought to market a couple of years or 2 years ago to transition the entire business onto it because strategically, being an investment ops and admin business is not challenges core strength. We looked at it, we thought there was an opportunity, there wasn't. So we pivoted quickly and the transition is happening at pace across to State Street as a partner. So all those tools, Alpha 1, that is a replacement of the SimCorp Dimension platform. But with that old model, you have to have separate custody from the technology, which changes the economics. And you've seen the improved economics in the cost base of Fidante and the Funds Management business these last few years as we've moved to the new State Street rate card, and we've taken to group the residual expense as we migrate off the old operating platform.

Richard Amland, CLSA. With the changes to the capital standards and the positive impact upon the annuities business, do you expect to see international annuity providers come in on basis that the environment is much more positive? Does that impact your growth in terms of your outlook, competitive hurdles? Or does it grow the pie, raise awareness of the product? Can you just talk to that, please?

Yes. I might start and Anton can have some comments on this as well. So we have already started to see, I guess, the reawakening of an old competitor in the new formed Ascender. So they are in market with new product. I guess our perspective on this, and we've been pretty clear publicly is that we welcome the arrival of call it competition, but the market, the Challenger takes today, percentage of market share that we take is so small. And what you've heard this morning is the opportunity to open up that market at scale. It'd be pretty inconceivable that a single business like us would be the right answer for a far larger market than we see today. It positively normalizes the product, brings a discourse or conversation in market beyond just a single voice. And a comment that we have made to regulators and policymakers leading up to the changes to capital standards in the absence of making changes like we've just seen, you'll end up building a whole lot of product in this country that is designed around the capital standards because it's subeconomic to launch funded annuity products. And so I think one of the arguments that's been very successful and is right is that having more funded guaranteed income products is a really important development for the market. And pleasingly, for the big opportunities in the partnerships that Amanda was talking about on stage, we've been successful in winning those initial partnerships. So we welcome more competition, but we're doing everything we can to make sure that we are incredibly well set to continue to lead the market. But Anton?

Yes. APRA's explicit aim in changing the capital standards was to remove the constraint on supply. So they are looking to bring in more players into the market to increase supply. Whether that is the existing life insurers in Australia or expanding their product range or foreign companies entering the market, who knows? Time will tell. But I would say that, as Nick said, we do welcome competition. To date, we've been offering customers pretty competitive pricing to sort of entice people into the product. We're hoping that as the number of competitive -- competitors grows, as you said, it will grow the pie, it will normalize the product. And at the level that we're currently pricing at, we think customers are getting a good deal. And so we don't see that there being sort of huge impacts on pricing.

Okay. One more question for me. A lot of the Investor Days I've attended recently, the sort of management and Board has sort of approved sort of communication around 3-year plans and sort of high-level guidance -- not guidance outlooks, but financial targets and aspirations. You guys have had a history of growth challenges, and it seems like today would have been a good day with the APRA changes to sort of have a bigger discussion around that. With all the signaling that you're giving, it's positive, but there's not a lot of quantitative around 3-year hopes and dreams. What sort of -- what's held back the Board and executive from sort of diving into that a bit more?

Well, there's a couple of things I might say, and then I'm sure Alex will add to it. I mean, practically, we are in the Board approval process now through June. I guess when you -- I mean, I hope what you've heard this morning is that there's a lot more substance to the ambition than there's ever been before. It was always the case that the product is a good product, but the trickle that was coming downstream needed to be really unblocked. And so the only way to do that was to change how you access customer and to change how retirement advice is delivered and then to change that at scale. So whether it be the partnerships that we've announced that accesses the 2 million Australians, 600,000 over age 60, the retirement advice that is being delivered through Iress and if or our investment and partnership with Ignition that is unlocking that at scale in a really meaningful way offshore and the wins that we have had is going to bring this onshore. So you can't get -- you can't unlock it until -- you can't get it until you unlock it. And so the target addressable market is huge. That's never been the problem. Now we will -- we've got ideas because we've entered business plans with each of these providers as to what their expectations are. So I guess we hear you, we need to find some more ways to communicate the growth. I will come back in the last 4 years, when we set about this mission back in '22, growth, as I said, growth was one of the key things we needed to unlock. And we've used a bridge approach while we have strategically addressed it. So I've talked about how we strategically addressed it. The bridge approach as we turned to the distribution team, we said, do whatever you can to extend the tenor. And we called it the sales remix strategy. You've seen our life sales double in that period in the domestic market. And so we've -- and the longer-dated business success we've had has been a driver of our earnings through this period. So we've built the scaffolding now to move a growth profile to one that is more on than it is episodic hand-to-hand sales. But I might let Alex talk through the cycle because you did mention some...

Yes. No, I think the first thing to say is that we are just following our normal process and getting boards together sort of other cycle to improve things is pretty difficult. So we will get them signing off our budget in June, and we'll communicate sort of the official guidance in August as we normally do. But we've sought to provide as much detail as we can today in terms of directionally where things are. As you can imagine, there are more variables than ever before. This has been one of the most challenging budget processes to run because all of the things that we had as fixed before, like how we thought about asset allocation and how much capital we had, all became variables, which is really, really exciting, but something that's meant that we wanted -- we really stress tested before we were putting it in front of the Board. And so there'll be two ways to think about guidance going forward. There will be things that we can communicate about how we expect in-year numbers to land and then other metrics that are better suited for a 3- to 5-year horizon. And I'll expect to provide two of those as well as any buyback announcements once we've got approval from APRA.

Last thing. I guess looking at the share price and investors outcomes over the last 18 months, I mean, the share price rerated pretty heavily in February of last -- from February of last year, I think in response to the APRA regulatory changes. But in order to hold that, I think the expectation of the market is that growth does accelerate. And I guess there's just not an ideal or not an idea of any timing of when that might happen, what order of magnitude that I think...

Yes. Okay. Let me say a couple of comments. If a year ago, if I could have had a wish that we would be sitting here today to announce the 3 partnerships that we have announced, which were heavily competed, where these 3 super funds and platforms are investing tens of millions of dollars to unlock the opportunity on their side of the business, which embeds us into their customer segments. I mean that -- if we needed to win at least a couple of them, but to win all 3 of them was an outstanding achievement. So we've had 3 objectives over this last period, growth, achieving better financial returns and removing the risk from the Life company balance sheet. We sit here today with a balance sheet that's never been stronger, where we can actually look into, and I think it was Damian who made the comment that the world doesn't look so certain going forward. But for the first time, we can look into that as much as an opportunity as opposed to a threat. On returns, I think the runs are on the board, what we've achieved in the last number of years in the business. The way we have managed the business and the cost base, extended the tenor, achieved what we can out of the life returns and the fee income, which has been very successful and the growth we are unlocking. I mean we have grown the business a lot, whether it be the domestic or whether it be the Calix opportunity that is in front of us as well. So I think we sit here as a business, and we all want to grow quicker. It's the first time we've got capital to support the growth, and we've unlocked the opportunities that will create the circumstances for really scaled growth of the retirement market in Australia.

Nick, can I make one comment, too. Just having spent the last decade at a reasonably large super fund, one of the key issues for super funds is how to deliver advice to members. They've got more members and they are easily able to provide advice to. And I think one of the huge unlocks as well is what was talked about today with Xplan, which for me, that's just so far away from where Advice was positioned not that long ago. So the thought that we can get lifetime income into SOAs effectively, that is just a huge uplift for us. And I think that will be a material driver of growth as well.

Can we turn the microphone to Nigel.

It's Nigel Pittaway here from Citi. Just hoping maybe just to delve a bit more into the constraints of actually reallocating the assets more into fixed income. Are you basically saying that you can only do that when the spread environment is better than it is now? So in other words, that's basically the constraints until the spread environment is better, you can't really reallocate.

No, no. I wouldn't leave you with that assumption or that. That's not quite accurate. Obviously, there is a process of making sure that we realize value out of any assets we bring to market. So that could be in property, it could be in other asset classes, as we rebalance the portfolio. And I think the point that was made earlier is a really good one, and Alex, you might want to comment as well, that there is a process of ensuring that we optimize the capital through growth as well as we're growing the liabilities as well. So it's not just about simple rebalancing at the start of the year, for instance, we want to see growth. We obviously want to then be able to rebalance the portfolio appropriately. And as we're originating and finding new assets in fixed income areas, we'll obviously go through that rebalancing as well. So it will be a combination of all those activities that will drive us towards the sort of what we would see as being a more future position portfolio given the capital standards. But it will be a few different factors that will drive the pace and the opportunity set. So it doesn't have to be a spread normalization, for instance. Obviously, if we did see that, then we could probably lean in a little bit harder, but we'll be looking at all those different factors.

I think one of the dynamics we've spoken about a few times is needing to manage the asset allocation changes in a way that is accretive to shareholder outcomes. So if you're swapping AUD 1 of absolute return funds for AUD 1 of fixed income, you're probably getting a lower absolute dollar return for that, but using a lot less capital. So if we're getting a lower absolute yield, we need to be reducing the capital base sort of proportionately as we do that to make sure that the actual EPS outcome for shareholders is positive. So that's another dynamic, but we're certainly not waiting for credit spreads to low out to do that, hence, the buyback activity underway.

Okay, which kind of leads on to my next question. In terms of -- you're saying your target ROE will be flat. Most of your guidance is going to be around EPS and ROE. You're basically saying on both those metrics, the denominator is improving. So can you give us any comfort that what's going to happen to the numerator in those -- in the new world?

So in the near term, one of the factors we continue to face is obviously a very tight credit spread environment. So until that changes, it does make it harder to grow the spread income that we're making. We will manage the portfolio carefully and be really cognizant of the pricing we're offering so that we're maximizing the opportunity for customers, but doing it with relevance to the yields that we can generate. So in the near term, there are some constraints on that spread income. But we will provide guidance both in-year around that core spread income, ROE and EPS. And then in the 3- to 5-year, you'll be able to include the investment gains and losses that we make on our growth assets so that you get a broader long-term outcome of the contribution from that aspect of the portfolio too to those returns.

And maybe just a final question. If you do get sort of the growth pickup that you're anticipating in terms of sales, will you reallocate away from some of the sales that you've been generating lately? Obviously, it's helped the headline, but it's been pretty short-dated institutional sales. Will you remix away from that type of thing?

Thanks, Nigel. So you saw in this last result at the half, we did have some institutional short-dated business, and we were really pains to say to be clear that, that was priced well. So we were not paying overs for that business. And what we've seen in the dynamics in the retail market until recently, the last 6, 7 months, the shape of the yield curve has pulled the money short. So there's a huge amount of dollars in the term markets sitting very, very short right now. The pricing we've got out the curve is attractive, and the team are pushing hard on longer-dated business. I think your point, though, is right. Like as you open up new growth channels, by definition, you have more levers to pull in terms of where you deploy your effort and your activity. We -- but I wouldn't -- that's not the same as saying we orientate away from a segment. If you think about what Iress unlocks or the new tools if as that gets taken up by more advice groups, that in a segment of IFA market where our actual penetration remains quite low for the Life business relative to the advisers in force there. The opportunity for the team there to just continue to expand their adviser coverage is a leverage in addition to whatever we are getting through the more guided approaches that you're going to see through the super funds and some of the platform retirement strategies that the team talked about earlier.

Michelle?

Should we expect at the August results that you will also give us the FY '26 results in the new format so that we can understand FY '27 guidance? And then are you able to comment on dividend payout policy and if that will change, if it will be on core earnings or operating profit after tax?

Yes. Thanks, Michelle. So we will provide a great deal of disclosure to help people get used to the new framework. So the intention will be to translate FY '26 into the new world to provide a sort of prior comparative period, if you like. And then we will provide extra details about sort of reconciliations, if you like, between the 2 to help people understand what it is we've changed, recognizing that all of this is just recategorization, right? Like the statutory profit is what it is. It's just about the buckets that we put it into to help explain the results. So we'll definitely do that. And what was the second question? On the dividend payout ratio, yes. So obviously, that won't be off a normalized number anymore. So the core earnings will be a better reference point to provide dividend guidance. And so just mathematically, that will make it a higher percentage of core earnings.

Anja?

Hi, Anja Samardzic from AllianceBernsrein here. You've talked a bit about the steps that you've taken to try and reduce friction in the distribution process. I guess if we take like 0 as where you started from a paper-based system and 100 as being like your target end state, where are we on the journey at the moment? And how long will it take to get to that 100% target end state?

Yes. It's a great question. And it's quite complex to answer because it sort of depends which channel you're talking about. So if you take -- I think it was Laf's comment about the bolts, and I think Adrian used the word bolted on side of the platform. So the adviser experience there has not proven seamless. So most advisers then just use a direct approach to Challenger to do the business. As you -- under the new approach, you are inside the platform and you're inside that platform's environment such that whether it be the KYC, AML, the clients' details can flow through the transaction. So that's a very, very different experience. Where it's embedded into the super fund, we're an institutional offer into that program. So if you think about the super fund wins recently, we use a term of Group Life Annuity, GLA as a product. That actually gets written inside the super fund environment using inputs that we provide to them. So they're building the journeys, which would bring that GLA alongside their account-based pension under what they will call their retirement proposition. And so it will get sold as a bundle, an integrated bundle where we are just a building block of it. So in terms of where we are from 0, I guess, when we started this, we went and visited offshore insurers and had a look at the experience, particularly in the U.S. market of what it means to take sales frictions out and I don't think it's a statement beyond the obvious that something -- if it's a good product, but it's really complex to acquire, then you're going to get the hardy investor or buyer, most buyers won't take up the product. So what we believe happens from here is that the simplicity of the sales process means there's just immediate natural take-up of the solutions. Remembering what [ Sam Woo ], I think, was very useful the way he articulated from an adviser perspective today in Australia to actually write the product where it sits outside the market comparison tool means that they need to often get special approvals to be able to write that policy because it's not sitting as -- it's not built into the advice guidance process and system. So all of that gets unlocked. So where we get to is an environment where it's just automated. Now in terms of timing, the systems, the institutional systems and for the partnership, that's all built. We are just a taker of timelines from our customers. So as they start to launch the new solutions on MLC, on CFS, which we announced a few weeks ago and on BT over this period ahead. And you should be thinking they're moving pretty quick these groups, but there's a range of products, and it's for them to announce the products. It's not for Challenger to preannounce that we will form part of with them. That will be rolled out in market over this period ahead. And with the integrated platform solutions, I made the comments that the testing and the build is ongoing. We're 2 years through it. It's complex. Some parts are more complex than first imagined, and that's just taking a bit longer. But we are -- we're going to have some updates on the time frame there pretty soon.

We're just bordering on 12. Any further questions in the room? There are no questions on telephone. So I'll just move to online. There is a question online from Mr. John Lance just in regards to franking and just how much we have in our franking account to support any special dividend?

Thank you. So at the half year, I think we had about AUD 100 million in franking credits. And after paying the half year dividend, that would have come down by about half, so to be about AUD 50 million. We have a lot tax bill to pay come December. So that bounces right back up again in December. So plenty of franking available. We've also got the dynamic that having repaid Capital Notes 3 yesterday, that would typically have consumed about AUD 8 million worth of franking credits a year, which we won't need to use for that basis. So a healthy franking credit balance, but very cognizant of making sure we get those back into the hands of shareholders as and when we can.

Okay. Any further questions in the room? Just Freya?

Just maybe just a quick one on the 75% allocation to investment grade in the fixed income portfolio currently. Is there any plan to review that as you shift the mix?

Well, I mean, it will continue to be reviewed, but it's broad. I'd broadly expect it to stay somewhere around that level. Again, that goes to the risk appetite process we go through and making sure the portfolio is fit for the risk of the organization. But I'd assume it's broadly going to stay similar to that.

Okay. There are no further questions in the room. I think we'll call time on it. Thank you for attending today. Irene and I are on the telephones. Nick, do you want to say any final comments before we close?

No, I think I spoke for the whole Q&A, Mark.

All right. So thank you, everyone, for attending. And again, as I was saying, there's some opportunity to talk to management over refreshments. So thank you for those online as well. Thank you.