American International Group Inc (AIG) — Q2 2020 Transcript

Good morning and thank you all for joining us. Today we will cover AIG's second quarter 2020 financial results announced yesterday afternoon. The news release, financial results presentation and financial supplement were posted on our website at www.aig.com, and the 10-Q for the quarter will be filed later today after the call.

Good morning, and thank you for joining us today. I hope everyone is staying healthy and safe. Like last quarter, our team is participating on the call from different locations. I'm joined by Peter, Kevin, Mike, and Doug Dachille, our Chief Investment Officer, who will also be available for Q&A. AIG continues to show remarkable strength and resiliency as COVID-19 remains a formidable and ongoing challenge. Our global workforce has adjusted to working remotely and I am incredibly proud of how the team has become more unified and focused on supporting each other, our clients, and other stakeholders during this unprecedented time. Throughout the second quarter, we continued to build on the strong foundation created since late 2017 to instill a culture of underwriting excellence, adjusted risk tolerances, and implement a best-in-class reinsurance program. These actions strengthened and protected our balance sheet and are allowing us to effectively manage through COVID-19 and its collateral effects on the global economy in addition to natural disasters. We also made progress on strategic initiatives across AIG, including the early June closing of the sale of a majority stake in Fortitude, which significantly de-risked our balance sheet and represented the vast majority of our legacy portfolio. Our focus on de-risking is also reflected in how the overall investment portfolio held up during this extended period of market uncertainty.

Thanks, Brian. And good morning, everyone. Today I plan to provide more detail on Brian's comments regarding the General Insurance second quarter results, COVID-19, the current market environment and I will finish with an update on AIG 200. This month marks my third anniversary of joining Brian at AIG and when I look back at where we started our journey, the progress our team has made is extraordinary. As we've discussed on prior calls, during our first year at AIG, we determined the GI portfolio required a complete overhaul in terms of underwriting culture, establishing global standards and dramatically altering limits deployed. In addition, we knew that our businesses needed to be repositioned in the marketplace to become more competitive and relevant to clients. We also moved quickly to design a comprehensive global reinsurance program, which has been evolving as our portfolio improves. This program vastly reduced volatility and unpredictability in outcomes and was a critical component of our overall strategy, allowing us to move faster in re-underwriting the GI portfolio. We built a world-class team and a strengthened bench across the world, and our completely revamped risk appetite was successfully communicated to and accepted by the marketplace. We also achieved our goal of entering 2020 with an underwriting profit and since the second quarter of 2018, our adjusted accident year combined ratio has gone from 101% to 94.9%, a 610 basis point improvement. This is a result of the outstanding work done by the team and we've built considerable momentum that will allow us to continue to improve our financial results. With respect to our global commercial portfolio, it has been significantly remediated, and while there will always be opportunities for improvement, this portfolio is now positioned for further strengthening, more diversification, and profitable growth. In Personal Insurance, as I outlined in our last call, we significantly de-risked private client group, known as PCG, with the creation of Syndicate 2019 through our partnership with Lloyd's. In addition, in late June, we announced an agreement to transition the PCG upper middle market clients to Liberty Mutual and Heritage Insurance this fall. PCG is a market leader, and the innovative capital structure we carefully designed with Lloyd's, coupled with the disposition of our upper middle market business, allows us to now focus on the areas in the high net worth segment where we bring the most value to clients, as well as our brokers and agents.

Thank you, Peter. And good morning, everyone. Today I will discuss overall Life & Retirement results for the second quarter, our current outlook and the results for each of our businesses. Life & Retirement recorded adjusted pre-tax income of $881 million for the quarter and delivered adjusted return on attributed common equity of 13.2%. With a significant rebound in equity markets during the quarter, we saw favorable benefits to both reserves and deferred acquisition costs, which had been impacted by negative equity market returns in the first quarter. This market recovery is not reflected in our private equity returns for the quarter, since they are generally reported on a one-quarter lag. Adjusted pre-tax income decreased by $168 million from the very strong second quarter of last year, driven by unfavorable mortality resulting from COVID-19, lower returns from fair value option bonds to the volatile credit spreads, and the expected spread compression. Our current quarter also benefited from significant yield enhancements related to low interest rates, whereas results for the second quarter last year reflected a large IPO gain from a single private equity holding. Recognizing the limits of sensitivities, especially in times of macroeconomic stress and historic volatility, the sensitivities we previously provided have generally continued to hold up. However, our reported base investments spread compression is higher than we would otherwise expect, as we have continued to maintain liquidity and have held higher levels of cash on our balance sheet. Excluding the impact from this larger liquidity position, our base investment spreads would continue to be in the 8 to 16 basis point range of annual spread compression. Relative to equity markets and total yields, we have also updated our sensitivity estimates as of the end of the second quarter. We would expect a plus or minus 1% change in equity market returns to respectively increase or decrease adjusted pre-tax income by approximately $40 million to $50 million annually, a modest increase based on higher market levels than the first quarter. As for rates, a plus or minus 10 basis point movement on 10-year reinvestment rates would increase or decrease earnings by approximately $5 million to $15 million annually, consistent with the prior quarter. As always, it is important to note that these market sensitivity ranges are not exact nor linear, since our earnings are also impacted by the timing and degree of movements, as well as other factors. Our risk management and discipline are serving us well in these challenging times, noting our hedging program has continued to perform as expected and our balance sheet remains strong. We currently estimate our fleet risk-based capital ratio for the second quarter to be between 420% and 430%, well above our target range of 375% to 400%, providing a good buffer for the uncertainty of the current environment. Further, as we have repriced and restructured many of our products, our new business margins generally remain within our targets at currently minimal returns. Sales were significantly lower in the quarter, especially in the retail annuity market, as our distribution partners responded to their own challenges. Towards the end of the quarter, we began to see improvement in retail annuity activity, as our distribution partners responded to the new environment. As of today, based on early indications, we have seen a strong rebound in sales compared to June and our retail new business pipeline continues to build, suggesting improving volumes from historically low second quarter levels. Our broad position across products and channels has been especially advantageous during these times. For example, as retail annuity sales languished in the second quarter, we expanded our pension risk transfer business, concluding several significant reinsurance transactions. We remain well-positioned and confident to deploy capital as attractive opportunities arise across our businesses. Now, I will turn to our second quarter results for each of our businesses. The challenging sales environment for individual retirement that I noted resulted in negative net flows for annuities. For group retirement, premiums and deposits decreased due to lower new group acquisitions, as well as reduced individual product sales. Despite lower sales, net flows were essentially flat due to lower group and individual surrenders. For our Life Insurance business, total premiums and deposits increased due to higher international life premiums. Our estimate for the impact from excess mortality of all causes, including COVID-19, is also in a level of mortality net of reinsurance and longevity offsets that is modestly higher than pricing assumptions. Based on a small and evolving dataset, we currently estimate that around 40% of our COVID-19 related death claims reflect an acceleration of claims we would have otherwise experienced in the next five years. Our recent mortality experience will be factored into our longer-term experience studies in our annual review of actuarial assumptions, which will occur in the third quarter. In isolation, we do not currently expect COVID-19 losses to have a large impact on our long-term mortality assumptions. For institutional markets, adjusted pre-tax income was favorably impacted by the yield enhancement activity I noted earlier. We significantly grew premiums and deposits and continue to develop attractive new opportunities across the portfolio. In particular, the pipeline for pension risk transfer opportunities, both direct and through reinsurance, is very strong. To close, we remain well-positioned to meet the ever-growing needs for protection, retirement savings, and lifetime income solutions. Now, I will turn it over to Mark.

Thank you, Kevin and good morning all. AIG produced strong underlying performance this quarter, particularly in the thematic areas of risk reduction, liquidity, and capital preservation. Overall, AIG reported adjusted pre-tax income of $803 million and adjusted after-tax income of $571 million or $0.66 per diluted share, compared to $1.3 billion or $1.43 per share in the second quarter of 2019. The key drivers of the year-over-year reduction were higher catastrophe losses from COVID and civil unrest, along with lower net investment income. Positive contributions stem from continued improvement in general insurance adjusted accident year results, stronger likely retirement returns, and our ongoing disciplined focus on costs. As Peter noted, the continued focus on general insurance underwriting profitability and expense management drove a 120 basis point improvement in the accident year combined ratio excluding catastrophes. However, commercial lines were even stronger with a 400 basis point improvement on a global basis, made up of a 320 basis point improvement in North America and a 500 basis point improvement in international. General Insurance's second quarter after-tax income was $175 million, down $805 million from the second quarter of 2019, due to a $350 million reduction in net investment income, driven by the combined impact of alternative investment losses and the continued impact of lower reinvestment rates on available for sale income and a $500 million increase in catastrophe losses. Peter discussed second quarter catastrophe losses, but I'd point out that in the aggregate they represent 11.9 loss ratio points and that the non-COVID non-civil unrest catastrophe reserves represent just 1.6 loss ratio points versus 2.6 loss ratio points in the second quarter of 2019. Prior period development was net favorable by $74 million, $53 million of which was associated with the amortization of the deferred reinsurance gain. For North America personal lines, the combined impact of lower travel premiums and the Syndicate 2019 structure sessions caused a sharp change in business mix within the segment for the quarter, which impacted both the loss ratio and expense ratio compared to the prior year. These impacts, which include some catch-up premiums, caused the net written premiums to be negative for the quarter. The structure, however, should significantly reduce the future combined ratio volatility of the personal lines book while allowing us to continue to profitably grow this business. Looking forward to 2021, we anticipate retaining approximately 25% of the PCG premium. However, for the balance of 2020 for the totality of the North America personal insurance segment, as reported in our financial supplement, we estimate roughly $425 million and $325 million of net written premium and net earned premium respectively for each of the next two quarters.

Thank you, Mark. I think it's time for Q&A. So operator, can we start the Q&A process?

Thank you. And good morning, Brian and everybody. First question, focus on North America Commercial lines where your core loss ratio improvement looks pretty decent on the surface. I guess, I'm going to dive into that a little bit. You know, we've seen some competitors talk about some frequency benefits because of COVID. I suspect that's not much the case here. But I want to make sure, given your book of business, high layers, high limits, and larger corporate accounts, that may not see - you may not be seeing as much frequency benefit from COVID in that core loss ratio for North America Commercial. So can you maybe talk about that a little bit and go through what’s really behind that 1.7 improvement?

Well, I think that's - Michael, that's a good question for Peter and the frequency benefits or lack thereof. Peter, can you answer that?

Yeah, sure. Brian, thank you and good morning, Michael. You’re correct, we did not take the frequency benefits in the quarter. If there was any sign of a better frequency relative to expectations, it was in some of our international business in auto in Japan. But we've seen that over the last several quarters. You know, when you think about - I'm going to go to workers compensation, because I think that's the one that stands out the most, which is, you know, we've had frequency in COVID, it's typically I would say 70% in industries related to healthcare. But it's very unique because again, we have high retentions, most of that over 90% is related to businesses where we have a deductible of $1 million or greater. So that frequency really hasn't impacted us. And then we have seen a commensurate reduction in frequency in non-COVID related claims. Again, their observation this quarter, again, a lot of it is on retention business, but we haven't recognized it yet because we want to see how it emerges. You know, one thing back on COVID workers comp, which is very interesting is that over 50% of the claims that we've seen over the last four months, about 50% of them are already closed. So it's a very different type of loss relative to workers compensation. Other lines that we've seen in liability and auto, again, it'll be slow to recognize that. We've seen reduced frequency and we’ll give you an update next quarter once we have a little bit more experience.

Okay, great. Thank you. Second question would be throughout all last year, you guys were one of the few companies that did actually have a margin improvement, and that's because of all your renovating opportunities done for the past couple years. I guess, can you talk about where you are in that process? And what inning are you in with the efforts? You mentioned rate, now we're all getting rates from all trend you said. But how much of that re-underwriting effort has been done and how much more still can be done?

Okay, Michael, I think again, that's Peter.

Yeah, Michael. So I think we're in a really good place. I mean, you know, we - when I said in my opening comments, what are the areas where we had headwinds in new business, which I think the industry has seen when everybody was going to work remotely, what drove the growth, it was driven by better retention. We had, you know, 400 basis points of improvement in international, 500 basis points improvement on retention of our clients within North America. So I think that reflects that we like the portfolio, and we're trying to be very helpful to our clients and distribution partners by deploying capital, of course, you know, in a different dynamic and need to make sure that we're getting the appropriate returns. And I think you saw that in the rate. So I think the combination of retention of a portfolio we like and we can grow, combined with a positive rate environment, I think contributed to the overall growth on the NPW commercial.

Okay, Michael.

Hi, thanks. Good morning. My first question is also related to the Commercial business. You guys mentioned some of the prices that you're getting are into the double digits and said that that's in excess of trend. Could you just give us a sense of, you know, where loss trends fit in your commercial business and how that's, you know, changed so far this year, just as we think about kind of the spread between price and loss trend on that, you know, can start running through your margin?

Okay. Elyse, thanks. I think in terms of trends, et cetera, certainly Mark is the better responder. Mark, can you answer the question?

Yeah. Thank you, Brian. Appreciate that. Hello, Elyse. So, you know, in the areas, I think that mostly asking about, take like excess businesses, that trend, pure loss cost trend is approaching double digits. When you get into auto, it's a little bit less, probably in the 7%, 8% area. And then other primary lines are a little less than that. But you've got - when you weigh it all together with things like, you know, with property and other loss sensitive-related exposure bases, it kind of drops it off. So there's - I'm not going to get into the weighted average in total, but I’ll tell you that we look at every single line and reflect that in our thinking. I wanted to give you the range where it could be a couple percentage points and some short tail lines up to almost double digits in some more volatile excess line.

Okay, that's helpful. And then my second question is on the earned premium, I guess on Commercial lines and you know, Personal lines is impacted by that quota share. But within Commercial we've seen some pretty good growth in both North America and internationally on the written side, but earned premiums are still decelerating just given, you know, a lot of your business mix actions that you took. So is it the right way to think about it that, you know, just given the earnings, we could see some pressure on that earned within Commercial over the balance of the year and that could start to see some growth in 2021?

Mark, why don’t you take that one too, please?

Yeah, I think you actually answered your own question. You get the increasing, you know, impact of the Casualty quota share, and that's really what you're seeing.

Okay. Elyse, thank you. Next question, please?

Thank you. One quick numbered questions and another broader question. First one, Mark, I wonder if you could give us a quick guidance on what dividend and interest income is going to look like in General Insurance? Big drop off, obviously, in the second quarter, was there anything unusual there? Is that kind of a run rate given where we are right now, as far as investment yields?

Hey, Mark, go ahead, please.

Yeah, thank you, Brian. You've cut out a little bit on me Brian, were you asking about investment yields in General Insurance?

Yeah. I am looking overall but also in General Insurance, in particular, you had a big drop off in investment yield sequentially. And I am just wondering if there's anything in there or rate securities or something else that was causing the drop so much or that's kind of a true run rate?

Yes, yes, actually. You guys are getting good. You’re answering your own question. So there's two things going on, the last quarter, I think was the first quarter we allowed the disclosure to even see that. So the drop off you see is somewhat caused by what you just said, and I'll get it that more a little bit later and one of it is just a bit of a correction. So, last quarter's General Insurance yield was over – so think of it as overstated. There was a $20 million Canadian security correction. But I think the heart of your question, so that would have come down another 12 basis points, something like that. To the extent of - on the current quarter with the structured securities, you're right, a lot of that stuff is floating, but you're really required to retrospectively look at it and look at what has happened and what your view of the future is, and what that implied yield is and if that yield is lower than what you've booked, you have to do a catch-up on it. And that's what you're seeing in the quarter. So you can adjust for some of those, Brian, and it looks to me it be a 9 to 10 basis point drop off sequentially, not as steep as it appears.

Great.

Brian, do you have a follow-up?

Yeah, absolutely Brian. And this is I guess, more for you and Peter. Given how low yields are right now, I'm wondering what type of underlying combined ratio or combined ratio do you need to achieve, do you believe in your General Insurance business now to earn an acceptable return on capital? And if you had to kind of alter your targets?

Well, that's a great question, Brian. I guess I'll take that. Yeah, I mean, double-digit returns with a higher interest rate makes sense with these low interest rates, it probably comes down. You know, I would say that, it's an evolving - right now, it's an evolving process and, you know, it's difficult with COVID to understand what steady state looks like. But, you know, my gut would say that something in the double-digit range is possible. It's becoming more difficult because of the low interest rates. So it's more like, you know, what's the return over the risk-free rates. So, I - it's hard to say, you know, we're just driving this thing down. When we get into a market like this where rates are rising, terms and conditions are improving, you're not - you don't have a fixed number that you're going to try to hit. We're going to take advantage of the market and have the results that we can achieve with this elevated level of risk received in the marketplace, I guess, that’s the best way to put it Brian. Can we move on to the next question? Thanks.

Hi, thank you. As we've talked about some of the benefits from Syndicate ‘19 in terms of volatility and reduction in the fee income you'll generate and those makes sense and should be clear positive over time. Stepping back from a near-term perspective, do you see this as enhancing or detracting from the normalized earnings of the personal line segment?

Eric, let me start with this and then I'll let Peter pick it up. So look when you make a change like this, there's certainly a disruption, you know, with ceded premiums and the unearned going out, and so there will be some dislocation. Obviously, we saw in the second quarter to bleed into the third. Overall though, you know, when things normalize, as we approach the end of the year, this will be a net benefit to the company, it is a - as Mark said, a capital-light structure and it basically allows us to grow the business and we could not grow it given the concentration of CAT exposure. With the approach we've taken now with the structure of Lloyd's and its capital efficiency, and the ability to spread it, we can now take the benefits net and actually grow it and have the net grow. Peter, do you want to add anything to that?

Yeah, just a couple of points. Brian, as you said, I mean I think de-risking and repositioning the portfolio for growth is important. That reduced volatility increases capital flexibility. I think the second quarter is going to be the noisiest just because of the catch-up on the unearned premium, and seasonally the second quarter was the largest on the net premium written side. So again, you’ll still see some noise in the third and fourth, but not to the degree you saw in the second and we've just been very focused on accelerating the transition. So we can get to 2021 with the unearned, you know, largely gone away and then reposition Syndicate 2019 to be very competitive in the market, in terms of value. So we're really excited about what this is going to mean for the business and for our clients and distribution partners.

Do you have a follow-up Erik, do you have a follow-up?

Yes, thank you. And then second, just with the lower level of sales in Life & Retirement, how does this affect your outlook for capital generation? And are you planning to keep any sort of excess capital you generate in the Life subs? Or do you see opportunities to shift capital to P&C to take advantage of some of the more favorable pricing backdrop?

Well, let me have Kevin just talk about the sales, because we are seeing a pickup. So it may be premature to talk about our capital, but I'll get back to that. Kevin, you want to start with the sales piece?

Yeah, sure. Thanks, Erik. The quarter was the lowest in memory. But, you know, towards the latter part of June, we saw some real signs of life. During the quarter, the channel that really was disrupted the most was the bank channel, which was down around 60%. And if we look at just the month of July, over June, the bank channel was back to almost double. So, you know, that the disruption that impacted that channel the most we've seen starting to turn around. For financial advisors, broker dealers, and IMOs, you know, they were down about 40%. But I think that the virtual sales practices that they adopted, and we tended to reprice earlier than many companies. And so I think as other companies caught up with repricing that leveled the playing field a bit. Again, what we saw following the month of June, looking at July over June, we saw substantial increase in sales and the pipeline is growing and our sales of annuities per day continue to increase. So we're pretty optimistic that if conditions continue the way they are, we'll see recovery in July over June and in the third quarter over the second. Life Insurance continued to grow despite the disruption, we saw about 4% growth in the second quarter. And that trend continues, particularly our direct channel is performing very well. And in retirement services, it's important to note that periodic premiums, which are really the backbone of that business, we’re only down 4% in the second quarter. And again, you know, our advisor channel is back up and focused on their customers and its individual sales generally follow the retail individual retirement sales. So when you back that up with the fact that the pension risk transfer business and pipeline is as strong as we've ever seen it and we've opened up the reinsurance channel, we feel cautiously optimistic that the second quarter will be the low watermark and our strategy will prevail in the third quarter and beyond, recognizing all the uncertainties in the market.

Yeah. Thanks, Kevin. And I’ll just add, if you look at the opportunities, they seem to be much more in GI though, yes. It's not as extreme as maybe the sales in the second quarter might have indicated. But, you know, we will move our attention where we think the greatest growth and returns are occurring. And right now, GI looks pretty good. So we move on to the next question then please?

Thank you very much. A couple of questions on GI. So first, can you maybe talk about how you're thinking of loss fix here with rates well in excess of loss trend? On the one hand, you also have the COVID-driven favorable frequency, more short term, I guess, on the other. And I asked what's in the context of North America commercial loss ratio, which I guess improved year-over-year, but actually weakened a bit sequentially?

Yeah. Thanks, Yaron. I think that's a Mark question. Mark, loss fix?

I can certainly start that. Thank you, Brian. Well, you do have a lot of forces. We’re happy to be, I think one of the catalysts on this market. The level of increases, Peter talked about it continued to increase at an increasing rate, I think it’s a fair statement. But you do have other things, we don't know the longer-term impacts on many third party and first party lines of COVID, for example. Social inflation is more of a general upward movement, as opposed to a lot of specifics that you can nail down. And so I think there's still the thought amongst us in the industry that there's potential for freight moving up. I think there should be some back-to-normality between interest rates and inflation and we're probably heading more into an inflationary environment. So a little cautious on the fact that we're seeing this great rate increase, and there's more variability, and I flipped it from a year ago, where there was more variability around, what kind of price increase can we get? Now we see that the magnitude of the price increases we can get, and there's more variability about the future look loss cost trends.

Okay.

Yaron, do you have a follow-up?

I do. So in the – in commercial premiums that have been growing, and it sounds like you're pretty constructive on those lines and growth there. Can you talk about the potential offset impact of exposure there? I think we've heard from some of your peers that exposure is coming in, and that’s quite a headwind?

Yeah. Peter, can you talk about exposures?

Sure. Thank you, Yaron for the question. I think when you think about compared to our competitors, remember, we don't have as much guaranteed cost business. And so therefore, it's not a direct correlation to effect on payroll sales, and that's going to result in a commensurate premium reduction. You know, as we have the in-force book that we have minimum deposits on our excess business, in most cases. I think when we look to the future in terms of some of the changes on frequency and changes on payroll and sales, you know, it could have a modest headwind, which is what we had talked about in last quarter's call. In terms of exposure base for renewals, you know, could have a slight impact on premium, but I would look to it that we're trying to solve issues on excess. We're deploying capital, and those have led to better risk-adjusted returns because we are still coming up with similar structures. And while there may be a little bit of light headwinds in terms of overall exposure, that should not have a material impact on our premium, as we look to the third and fourth quarter based on what we know today.

Thank you. We've run a little late. Maybe we could take one last question, operator?

Hi. On the travel insurance book, I think you wrote a little bit over a $1 billion of premiums last year. Can you discuss how much that shrunk and whether you're seeing any sort of signs of recovery in that book, either in the US or in international markets? And then also on P&C, with you having restructured your portfolio and reinsurance program? Are you thinking about any major changes in reinsurance, as you're looking at next year, given the hardening market there?

Jimmy, the first book of business that you referred to was what? I didn't pick that up…

The travel book...

Yeah, got it. Yeah…

Yeah. So on the first one on the travel, again, the second quarter, you know, you had not only no new sales, you also had cancellation. And so I think that was one that was a headwind and contributed to the North American personal negative premium written. Now as we look at, it's hard to predict, again, we don't know what's going to happen with COVID. We don't know when travel is going to resume. It's less than a $1 billion in North America and it's fairly evenly spread in terms of quarter-to-quarter. I think we would have some modest sales in the third quarter, probably about a third as to what our run rate would be. But again, very hard to predict. We think that there is a dynamic in that business that's interesting, which is, you know, nobody really contemplated, I think, in terms of clients, and the CAT. And so I think there's going to be a rebase in terms of how we price this business, what the economics are going forward and don't want to overreact, you know, sort of Q2 a quarter in terms of travel and think that as it starts to rebound, we think the economics will be better. But again, we'll give an update as to what it looks like in the third quarter in terms of if there's a rebound or not.

It was just on reinsurance prices going up, are you thinking about sort of maybe retaining more risk or changing your reinsurance program in any way?

Well, we're going to have to, you know, try out our virtual Monte Carlo in September, which is really with a kick off I think we probably would have had 100 meetings scheduled at AIG under normal conditions. I don't think that we're going to - you know, we look at the reinsurance structures and any repositioning, it will reflect the growth portfolio, not trying to say the market conditions are much stronger. Therefore, we're going to dump treaties because we always talked about the reduction of volatility, making sure we had more predictable outcomes. And we have great partnerships that we trade across every geography and multiple lines of business with our reinsurance partners. But we would expect to see changes in our reinsurance programs that reflect the excellent underwriting that we've been doing and the gross improvement that we've seen quarter-to-quarter. So we begin to have those discussions, and what we have in terms of structures? I don't think they'll be something that materially changes, but I would expect some refinements to reflect the portfolio as it is today.

Okay. Thank you, Jimmy. Thank you. Well, let me just close and thank everybody for joining us this morning. And I particularly want to thank my AIG colleagues around the world. I mean, these last few months have really been challenging on many fronts and I'm so grateful for your hard work and dedication on this journey we're on and I hope everyone stays safe and healthy. Wear your masks. Okay. Thanks, everybody.