Core Insights - The company reported a 24% increase in Investment and Savings Products (ISP) sales, which offset a 10% decline in new Term Life policies, indicating a shift in consumer priorities due to cost-of-living pressures [3] - Management attributes the slowdown in Term Life policies to middle-income families focusing on immediate expenses rather than long-term protection [3] - The ISP segment's growth was driven by aging clients reallocating assets into annuity solutions with income guarantees, showcasing the stability of the business model [3] Strategic Performance Drivers - The company’s relationship-based distribution model is seen as a competitive advantage against AI and automated wealth management tools [3] - Operational efficiency has improved as the ISP business transitions towards higher-margin managed accounts and fee-based advisory services [3] 2026 Outlook and Strategic Assumptions - Management projects a 2% to 3% growth in Term Life policies for 2026, assuming wage growth will outpace inflation [6] - ISP sales growth is forecasted at 5% to 7%, considering potential equity market volatility [6] - The life-licensed sales force is expected to expand by 1% as recruiting activity recovers [6] Financial Management and Capital Strategy - The company plans to execute $475 million in share repurchases through 2026, supported by high free cash flow conversion [6] - Consolidated expenses are projected to grow by 7% to 8% due to technology investments and enhanced sales training initiatives [6] - A loan was executed between the primary U.S. life subsidiary and the holding company to optimize capital conversion and support shareholder returns [6] Operational Context - Lapse rates remain elevated compared to long-term reserve assumptions, but normalization is expected as economic pressures ease [6] - Technology spending is increasing to modernize infrastructure for the ISP segment, which has doubled in volume over the last three years [6] - The portfolio's $113 million net unrealized loss is attributed to interest rate movements rather than credit concerns [6]