Good morning. I'm Tracy Benguigui. I joined Barclays recently as the new insurance analyst, and I'm pleased to chat this morning with Peter Zaffino, President and Global Chief Operating Officer, and Mark Lyons, CFO of AIG. Peter and Mark, thank you for being here with us. Just some housekeeping items before we kick off. There's a live polling question list on the left side of your screen. If asked for usernames, just please use Barclays. Look for the next button when you move through the polling question. We can see the results in real time. On the left side of the screen, there's also a Q&A box. This session's format today is Fireside Chat. I think we could start off with Peter, if you could provide us a big-picture view of AIG alongside marketplace conditions.
Thank you. Good morning, everyone, and thank you, Tracy, for inviting Mark and myself to join you today. It's nice to see you again, and congratulations on your new role. I thought I'd provide a few opening remarks, and then we'll turn to questions. 2020's been an incredible year. We knew coming into it that it would be an important inflection point at AIG, and that was before COVID emerged. These have been very challenging times for everyone, and at AIG, we doubled down on efforts that we had already started to execute on in order to reposition our businesses and make them more strategically relevant in the marketplace, as well as to make AIG a world-class organization that delivers value to its clients, shareholders, and other stakeholders.
I know you, Tracy, and I believe this audience are familiar with the direction we're taking the company in, which we outlined early on as establishing underwriting excellence, investing in world-class talent, fixing the core of AIG, reducing volatility, and achieving more predictable outcomes over time across GI and L&R. We made a lot of progress, and we continue to execute with a huge sense of urgency. As you know, I was named President of AIG in December of last year. On a personal level, 2020 for me was about pivoting to my enterprise-wide role, which is what I initially came in to do at AIG, and taking on oversight of other areas of our company like Life & Retirement, IT, and ERM, which recently moved under me.
Of course, continuing to spend a lot of time on AIG 200, which is a critical component of shaping the future of AIG and making the company more efficient, technologically advanced, and operationally fit for purpose given the various lines of business that we're in. Last month, we announced David McElroy as my successor in General Insurance and made other changes to the global leadership team. We've developed a very deep bench in General Insurance in North America as well as in international. I have every confidence that under David's leadership, we'll continue to strengthen General Insurance's position in the industry as a market leader. We will also continue to leverage our strong foundation to capitalize on the market dynamics we're seeing play out in Property and Casualty, including growth opportunities.
Some of our businesses, such as Validus, our reinsurance company, our specialty businesses, excess and surplus lines, which is Lexington, and financial lines, just to name a few, all which we expect to accelerate throughout the remainder of the year. Thanks to a lot of great work by Mark and his finance team, AIG remains financially sound. The decisive actions we took when COVID first emerged have positioned us well. Our liquidity, capital, and balance sheet are all very strong. During our planning for 2020, we never imagined that we'd be dealing with a global pandemic for an extended period of time. However, we were able to pivot and adapt very quickly, and I'm really pleased with where we are, the momentum we continue to build, and the resiliency of our workforce. It's been a heavy lift at AIG.
We've discussed this at length over the last three years, as well as things that we absolutely had to accomplish. While there's always more work to be done, we're excited about the future at AIG and remain laser-focused on delivering for our shareholders over the long term. Those are my prepared remarks, Tracy, I think I'll turn it back to you.
Excellent. Maybe staying on strategic priorities, what is next for AIG? We could touch upon AIG 200 in a bit, how do you envision taking AIG to the next level after spending the last few years on remediation efforts?
Well, as we look forward, it's how we continue to strategically position our businesses to be market leaders in either their geographies, or the lines of business that they're in. I mentioned a few in my opening remarks, such as our specialty businesses, such as our excess and surplus lines capability. With the market conditions, we think there's opportunities to grow reinsurance, and we have a great overseas operation in U.K., Japan, and Europe. I think I would focus on growth for us and for us finding ways, again, to be more strategically relevant, but also finding ways to grow the top line. I also think there's an evolution on how we position the businesses to have that competitive advantage.
Not only is it underwriting expertise, we don't have any restrictions on limit deployment, there's ways in which we can do more for clients across the world. The work that we're doing on the operational side will digitally enable us to do things on the underwriting side much more efficiently. When I think of Japan and other places where we have more interaction with small and medium enterprise brokers or agents, that digital enablement will give us opportunities for growth. The underwriting that we've done has significantly reduced our overall exposure over the past several years and has significantly reduced the volatility. Our reliance on reinsurance will continue to be strategic.
I think as we reposition the portfolio, we'll be able to do more things with reinsurance over time without taking more risk, that will give us opportunities for less spend perhaps, but more strategic purchasing within reinsurance. I think capital management over time will be very important. We've got to get through this global pandemic and making sure that we continue to invest in the businesses so they can be not only growth opportunities, but known as market leaders in everywhere we do business.
Great. I do want to circle back on your reinsurance utilization, just staying on the theme of strategic priorities. For AIG 200, how important is this project now, will the timetable change given everything else going on?
I think it's very important because there's just some fundamental things that we need to do in IT modernization, how we look at operations, what we're doing to use data better within the underwriting businesses. Having a data architecture and making sure that the underwriters are able to use that data to our advantage. I think it's very important. When we went to a work remote environment, it actually allowed us to accelerate a lot of that. We're meeting with more frequency. We're able to get more than 40,000 people within weeks to work remotely. We looked at our KPIs, we're at or at better levels than pre-COVID, and we've really been able to accelerate much of what we were doing on the AIG 200 operational side.
I think that's going to position us well for 2021 and 2022 to achieve the objectives that we outlined in prior earnings calls.
Great. It sounds like you feel good about all the underwriting actions as you approach 2021, you could retrench a bit on your reinsurance utilization. You've mentioned you do not have restrictions on limit deployment. One of your peers once relayed to me that they don't like sharing profits with reinsurers. Just given where we are with the hardening rate market, in very simplistic terms, should we expect AIG to meaningfully cede less premiums, or is this retrenchment more nuanced than that?
Well, I don't think anybody intentionally wants to cede off profit, but I think it really goes to more of a strategic relationship that you have with reinsurers. The strategy in terms of how we look at reinsurance doesn't change. What does change, which you mentioned at the beginning of the call, is just the incredible progress that we've made on the underwriting side. It's not just limits deployment, it's how we actually position the businesses, whether it's on the property side, the casualty side, our global specialty businesses, our global multinational business. We're just better positioned because of the excellent underwriting transformation that's taken place. I think that the reinsurance has to reflect the book of business that you have at the time. I think 2021 is going to be very important for us to look at reinsurance.
Examples would be, we don't deploy as much gross limit on casualty. We don't perhaps need as much in terms of up to $100 million limits. With the work that we've done on Syndicate 2019, the overall core cat exposure in peak zones for AIG has decreased along with the excellent underwriting that we've done in terms of reducing $ billions of limits. I think our philosophy remains the same, which is to have high quality global reinsurers that trade across multiple lines of business in the portfolio. We look at it as a partnership. There's an evolution process of how one approaches structuring reinsurance to make sure that you're not taking more volatility. I also think just taking a look at the index of the market doesn't really reflect AIG. We're a big company.
We buy reinsurance across multiple lines. Reinsurers partner with us because they choose the company, they choose the underwriters, and they choose us as an insurance company in terms of how they want to deploy capital. I think all of that will evolve next year to reflect the book we have, and I think our reinsurance will be revised accordingly.
Okay. Excellent. Just because you mentioned Syndicate 2019 and all the actions to reduce your cat and property aggregates. Given all the legwork you've been doing already, can you frame out what type of risks you would be potentially sharing with capital partners? It'll be helpful to also understand the profile of ideal capital partners.
Well, if I start with Syndicate 2019, that was designed to put together an innovative capital structure to address our high net worth business where we think we have a very good market position and see opportunities for growth. The growth is largely in peak zones. When you look at our commercial portfolio, our Japanese book, we already have a lot of peak zone exposure, it would be heavily reliant on reinsurance for its growth. We decided to partner with Lloyd's. John Neal and the leadership group there have been terrific in terms of looking at this as a partnership. We've been able to bring in top global reinsurers to be partners with us because they like the portfolio a lot and see opportunities for product innovation and for top-line growth.
We brought in Hudson Structured Capital, a capital markets group that wanted to make an investment and also take risk on the portfolio. We're all aligned in terms of risk-sharing. We have multiple partners that have different backgrounds, if you will, with the looking at Lloyd's, looking at traditional reinsurers to do whole account quota shares, having a capital markets group come in. All of that really was quite strategic. Now we can grow top line because everyone's taking a piece of the peak zone exposure, not the entire exposure. When I think about other capital market opportunities, we have AlphaCat, which is an ILS fund that has north of $4 billion of AUM. That came with the Validus acquisition.
We have high hopes to grow that over time and measure it by AUM and think that there will be a lot of demand for AlphaCat at January 1. There's other ways to set things up similar to that that might address retro capacity or may address other needs in the marketplace that we're going to be very nimble with investors because we originate risk, we have excellent underwriting capabilities, and that capital markets wants to find risk that has excellent underwriting and modeling. We think that's us.
Okay. You've mentioned AlphaCat and Syndicate 2019. Just on a mechanical question, AlphaCat is a sidecar. How would you characterize the Syndicate 2019? Is the inspiration to be structured like an unaffiliated reciprocal exchange where essentially Talbot would earn a management fee with a built-in profit margin in exchange for a policy and claims administration? Or does it look more like an AlphaCat where it's a sidecar?
No, it's different. Look at AlphaCat can take single limits that would not reflect a sidecar, so they can deploy capital that's underwritten, that hits the return thresholds of the investors to be deployed as a collateralized reinsurer. It has flexibility beyond just taking a line with Validus just to create capacity. It has multiple capabilities. I think on the syndicate, you should just think about it as Talbot's the Lloyd's Syndicate. They will be doing underwriting under the same discipline as they would be doing when they put their business plans into Lloyd's at year-end. They're going to oversee the underwriting and work with U.S.
colleagues as well as all of the different stakeholders, to make sure that everything that we've outlined to Lloyd's, that we're doing on the underwriting side, then we would look to do a lot more common account reinsurance on behalf of the syndicates. That's what we're doing as we approach year-end. I find them to be actually quite different, both strategic, both trying to solve issues for clients and also going after markets where we think risk-adjusted returns will be attractive over time.
Hey, Tracy, if I could, I would just add to Peter's pretty comprehensive view of that is from my angle, it changes the revenue model. You have more fee income coming in the door, which really drops down to the bottom line. I don't have to put a loss reserve against it, as an example. The catastrophe risk spread, I think in a very intelligent fashion, which then reduces the profile of cat from an AIG group perspective on a go-forward basis. It's got a lot of benefits that accrue.
Great. I have to talk about cats, just given how active this quarter has been. It seems to be shaping up to be the second heaviest third quarter dollar-wise over the last 10 years, just after Hurricane Harvey or Hurricane Maria in the third quarter of 2017. I'm not just talking about the impact of Hurricane Laura, and now we're seeing, which wasn't as bad as what everyone anticipated, and Hurricane Paulette is making a direct hit on Bermuda this morning. Could you share some early insights of your catastrophe experience so far this quarter?
Well, maybe I'll start and then Mark can add on to anything that he would like to share. Yeah, it's been an active cat quarter. I haven't seen anything. We're still looking through it on a gross and net basis in terms of what the activity is in claims, but there's nothing that I see at this point that would be an outlier. I think it will be all managed within our expectations. As we've talked about at length, I won't go into it, we have very comprehensive occurrence and aggregate reinsurance to protect the company from a lot of frequency or a lot of severity. As you said, there's still a lot of activity. We have five active storms with two hurricanes, one tropical storm, and two tropical depressions in the Atlantic at the moment.
Yes, it has been very active, again, this is what we planned the overall gross limits and making sure that we manage peak zones and making sure we have reinsurance to respond to quarters like this where there's a lot of activity. I don't know, Mark, if there's anything you want to add.
Actually, no. What I would've just said is really what you said, which is at this point, we don't see any of those being outliers for us. Reinsurance has both vertical and horizontal components, so we feel pretty good about it.
One thing I would add, this has been the case over the past several quarters of cat, is that the excellent job we've done re-underwriting the commercial book, that really hasn't been a big contributor to a lot of the cats we've seen in the past, wildfires or perhaps wind for Private Client Group or the typhoons in Japan. I think we've done a really good job on the commercial side with the re-underwriting and doing that at pace, that the peak zone exposures for the commercial, they still exist, but they're much more manageable, the reinsurance reflects, again, the book that we have today there.
Okay. Maybe moving on to COVID-19 reserve adequacy, maybe I'll turn the question to you, Mark. So far, AIG has reported $730 million of pre-tax COVID-19 losses. Since we just spoke about catastrophes, while it's not apples to apples, $730 million doesn't feel like the worst 2 quarters of cat experience. In your opening remarks, you mentioned that COVID-19 would be more of an earnings event, not a capital event. Are you just as bearish now as you were at the start of the pandemic, or are these losses just take more time to manifest?
Well, it's a good question, I think what you got to think about is that you really can't put up a reserve on your books for everything that will occur. This is an ongoing event. It affects your gross views. It affects your ceded views as to what's recoverable. It's very complex. What do we do as of any balance sheet date? We put up management's best estimate based upon claims that have occurred at that point in time, taking due consideration to triggers and individual coverage parts, and so forth. We can't really reach forward and do that, because then it's in direct conflict with the other premium reserve. Therefore, you'd be overlapping, be redundant. I think to some extent, there's some misunderstanding of that.
I think that intro is really going to the conclusion that every quarter, we look at what's emerged, what are the characteristics, what lines of business are affected, and you always do a retrospective look back to one Q and two Q, where the original assumptions still hold water. Does the emergence against those still hold water? That's the ongoing process. That's what we would expect to continue to emerge.
All right. Maybe I'm being a little cute here, but should we add an E to IBNR and make it essentially incurred but not enough reported? Let me unpack that a little bit. I understand that the accounting standards for putting up IBNR are based on two criteria points, losses have to be estimatable and probable. A pandemic like this has not been tested in modern times. Mark, you described some of the complexities, but how would you describe the new reserve path in a COVID-19 world?
Well, some of it I think is similar to the answer I just gave, but it is a bit different in that it's continuing and ongoing. We know there's going to be creative plaintiff bar approaches. In some lines of business, like in some areas of first responders and comp, you've got some regulatory direction on that. You don't really see that on the GL side, for example. I think what we've got to do is continually look at what kind of claims are emerging, because that could really shift lines of business as we go deeper and deeper in. I know there's been some thoughts that the GL policies could be tapped for a business interruption cousin, if you will, on that. That's really not going to happen. You got the CCC, care, custody, and control exclusion. You don't really have first-party coverages and property damages.
It's a nice theoretical idea. We may have to expend defense costs associated with it, but it's really not anything that's going to really hold water. We actually expect on the GL side to have more defense cost issues than indemnity issues on a roll forward. Hopefully that gives you some of what you're looking for.
Yeah, on GL, I actually heard what may be tested is the employer liability, which should be excluded from GL. Again, that's a coverage that hasn't been tested. Is that what you're referring to?
Well, there's that, there's also, sticking on GL for a minute. That's a third-party cover, right? On the bodily injury side, a good example might be a restaurant, right? If a patron to a diner, to a restaurant got sick and they didn't follow established protocols that'll come out. There's some liability that could accrue in concept, how to prove that when they're exposed across the board that it came from there as opposed to the restaurant they went the day before. It's very complex, hence more defense costs.
Okay. Just my last question here on the COVID-19 tail risk. My math, AIG's put up about 30% of its reserves for long-tail lines, working back from a comment you guys made at another conference. Given these losses may take more time to manifest on the liability side, how did you get comfortable with the 30%?
Well, some of it is kind of what we just talked about, which was the fact that we expect the complexion really of those longer tail lines to be different, more on the defense cost side, I think firstly. Secondly, I kind of look at that a little different than the 30% that you talked about. I look at it more as to what proportion is case reserve versus IBNR. At the end of second quarter, it was roughly 20/80, 20 case, 80 IBNR, but that's biased. That's biased towards the very short report. You've got travel in there, you've got A&H in there, some event cancellation. When you control for those that I think anybody would realize are quick pay areas, it skews a lot more to IBNR, which is one of the real closer to the 90% range, which is how you get the comfort.
Okay, great. Staying with you, Mark Lyons, on shifting gears to capital management. AIG suspended its share buyback program starting in the first quarter in order to continue to evaluate the effects of a global pandemic. Since then, we've seen some market recovery, both on the equity side and credit spreads are tightening. Can you provide any visibility when you think the markets will settle down enough to get more comfortable with reinstituting your repurchase program?
Well, yeah, good thought. I guess I have two thoughts on that. First is a fork-in-the-road answer. Then the second one is your view of that rebound and how sustainable is that rebound. There's a lot of optimism in the financial markets, some of that could regress itself. I think fundamentally, the fork-in-the-road comment refers to will we have a second wave or not? When businesses reopen, when schools reopen, when colleges reopen, congregations happen a lot more often. If we don't have a second wave, I think we're going to get a lot more visibility in the early part of 2021. If we do have a second wave and there's other rounds of governmental programs that could continue to sustain some investable assets, like the government investing in corporate debt, for example, buying corporate debt. That's been a buffering benefit.
The combination of whether we have a second wave, in my estimation, and the degree of government programs really kind of changes and the visibility. My crystal ball, and I assume yours, is still fairly cloudy on that right now, but that's my view of the path of starting to get some clarity. I don't see it before the beginning of next year.
Okay. I guess in a more normalized situation, when you think about your capital deployment measures, hypothetically, how would you rank file your choices? I know de-leveraging is important for you, but if I also add buybacks, M&A, and just how upbeat you are about pricing and the underwriting capacity you have to deploy.
I think, just for context in that, I'll just take 15 seconds and go through what we have done, then I'll reposition back to your question. You and your listeners may recall that in March, we did a partial draw of our revolving facility of $1.3 billion. We fully repaid it in the next quarter. It was done solely out of a predominance of caution, both in capital and liquidity, because especially back in March, we really had no idea of the extent of government programs and everything else. As a result, we wound up doing a very successful $4.1 billion debt offering, which also provided the same level of buffer, if you will. Embedded in that was $2.8 billion of pre-funding of maturing debt that goes through first quarter 2021.
It allows us for the unanticipated spikiness or unanticipated government response or a second or third wave because we didn't know, right, at that time. We're actually in a pretty good position from that respect. Back to the heart of your question, given that the natural debt maturities are going to eat into a lot of that excess, if you will. We're going to be back by the time we're reporting 1Q 2021 results. We expect our leverage ratios in both our view and rating agency views, including your prior employer, to be much back in line with what we had discussed with the trading agency at that point. You've got a lot more flexibility of talking about, okay, investing in the business, which is on the PC side, clearly the hardest market since 2010. I think everyone would say that.
You could even go back to earlier cycles, perhaps, and make comparisons. That's one of the things we're here for, right? Invest into the core business that we operate. You've also got AIG 200, as Peter's already denoted, is important and with a strong payback associated with it. Share repurchases, of course. Outside of getting that debt reduction down, these are not necessarily serial. Some of these can be done concurrently, at the same time. We don't have M&A on our radar at this time at all, if that's helpful.
Maybe just switching over to Peter, maybe the anti-M&A question. Could we expect AIG to have more buy-side prospectively, and how important is it to you to be a composite P&C and life insurer?
The first part, we've been looking to prune. We just announced last quarter, our mass affluent book, which was the level below a high net worth, where you really can't get enough cat and really can't get the returns, at least within AIG, so we divested that. We've gotten rid of some of the program book. It's really just been pruning, nothing material. On the composite, there's really not much more to say than what Brian said on the earnings call. He as the CEO, his management team always have a role in looking at the best strategic direction for AIG. Life Retirement's a very good business, has been a major contributor to AIG over many years, but in particular when we were trying to reposition the General Insurance portfolio when Brian and I arrived.
We know the sector's facing some headwinds now, the job as a management team is to always look at things and I think I'll just leave it at that. Overall, again, we believe that there's been headwinds, but that the businesses are being repositioned, particularly on the property and casualty side, to show value and to show that the underlying combined ratios have runway.
Okay. Maybe because pricing is such an important topic, we could shift gears, and I'll play on some of your words, Mark, about pricing dynamics being just as, I guess we haven't seen it as good as 2002. It's interesting. It's almost sacrilegious to call pricing environment a hard market. That's the term that's being thrown around a bit. Looking at your results, last quarter, you had a 7% increase in North America Commercial premiums. You could argue it isn't enough considering rate increases and the fact that retention went up 4-5 points compared to last year. Why aren't we seeing more of a premium uplift?
Mark, why don't I start with that, then you can add to that.
For sure.
Yeah. You mentioned North America Commercial, there's several variables that one should consider. One is we are very pleased with the overall growth. We had roughly 16% rate increase. At the same time, the commensurate exposure decrease was happening. It wasn't on a flat portfolio that was growing. Examples of that would be on excess casualty or financial lines where we may have taken meaningful lead positions, and that's it. We take now a lead layer, set the pricing, but also benefit by taking excess. That might have a little bit of an implication on some of the premium, but risk-adjusted, it's much stronger. I think the dynamic a little bit in the second quarter, probably see maybe some of it in the third, was just when everybody went to work remote and work from home, is new business slowed down.
I don't think that's going to be a permanent situation. I think in the second quarter, it certainly was exacerbating because clients, and particularly the brokers, weren't going to be marketing RFP and working more with their incumbent. I think that as we start to get out of the third quarter and get into the fourth quarter, look to 2021, I think that new business will pick up. Again, overall, we're really pleased we're actually showing growth in areas after we've had to do so much work on the re-underwriting. Think the portfolio's positioned to do that. It was actually an encouraging sign for us at AIG.
Yeah, I would just add a few things, Tracy, if I could, to that. It's also the difference between primary and excess business, right? Primary business, we see clear evidence of that, whether it's our auto business, BCG business, the AIG risk management business, the rate changes and the premium changes are close enough to each other, which you'd expect because they're generally ground-up views. When you get to excess business, whether it's property business, whether it's financial lines or casualty business, you can have, I'll just pick numbers for illustrative purposes, a 50% rate increase on that portfolio, maybe it's single-digit increase on premium. We actually have subsets where we've gotten material rate changes because of the pricing on the excess layer is to our benefit relative to the exposure, assume. You can actually get a decrease in premium as a result.
Its loss ratio massively accreted on that. It's a weighting average of all those. Also, Peter was making comments about North America. We have other segments of the book, like Japan, which is about, I don't know, 15% of the worldwide gross premium. It doesn't really move that much, right? That's a whole different marketplace, and you can make that claim in many personal lines areas across the board. Lastly is, we're looking, I think your comment's about the 7%, that's net. You have to take into account the reinsurance structures that Peter's already alluded to might be changing. Some of that high rate being achieved is actually being ceded off. That weighting on a net basis could depress some of that, which is, I think, why you're seeing what you're seeing.
Great. Just reminding folks to submit questions. We only have about five minutes left in this session. Maybe we could make this more rapid-fire just to make the most of it. Staying with you, Mark, we have to talk about interest rate environment. It seems now it's lower for even longer. The latest monetary policy feels a little bit different this time with more staying power. Holistically, as a large multi-line insurer, how do you wish to be positioning yourself to remain defensive?
Well, interestingly, it's different than defense. There's defense on the asset side, right? I think we probably want to have, and Doug Dachille I think has been doing a good job of this, continuing the move towards less risky assets, and you got to do this in context to the capital that they draw and the diversification that they provide you, right? There's offense in some of these. On investments and spread businesses, I think we have to be more defensive, but on the P&C side, we have to be offensive. I didn't want to just give you a defensive view. It's a hybrid view from that respect. That's the kind of thing that's looked at all the time. Clearly, that mixture, we don't want to be in a position where, take GI.
If it's got a three-and-a-half-year duration, you don't want to go to a five-and-a-half year fixed asset duration and massively expose yourself to movements in interest rates. That's not happening. That's always going to be matched on the fixed income side, and it's the assets within shareholders' equity where you can take some of the alternatives. We're not going to extend. We're not chasing yield.
Okay. You kind of talked about the offense, but on the defense, how has your investment portfolio been shaping up on a ratings migration and credit default perspective?
Yeah, actually very well. At this point, the actual downgrades are really not actually material. On the migrations, of course, what's the most important is when you go from triple B right down to a non-investment grade. Look at the sectors, I think you can see in the expanded disclosure we provided the last couple of quarters, you can really see that by unit and by industry itself. Given where our RBCs are for both the U.S. pool, the GI side, and the life and retirement side, which is actually north of the upper bound of their established ranges, there's a lot of absorbency in case that does kind of move differently as a go-forward basis. So far, neither one has been material.
We have about one minute left. Maybe I'll put either Peter or Mark on the spot for any type of bold 2021 predictions. It could be fun.
Well, again, if I was to predict the future, which I'm not great at, but I would say that for the market, I think that we are incredibly well-positioned. I think we have a lot of momentum. What it looks like each quarter next year is always hard to tell, but I think the market is really calibrating fast. I think we're out there leading and believe that we'll be incredibly well-positioned. I think top-line growth, continued improvement in the portfolio, and getting great risk-adjusted returns to improve profitability is going to be the story for AIG next year.
Mark, anything to add?
No, I think that's a great summary.
Okay. Excellent. I had fun chatting with both of you. Thank you so much.
Thanks, Tracy.
Thank you for your time.
Thank you.
Okay.
Thank you.
Bye now.
Bye.