 Compelling valuation – The life sector is trading below 5-year averages against the S&P 500 and in-line with other financial subsectors. And, HOLT® analysis suggests the group is cheap relative to expectations and historical valuations.

 M&A a catalyst – Several companies have indicated interest in de-risking by selling annuity and/or life blocks. We estimate ~$500 billion of FA/FIA and $1.3 trillion of VA reserves among the largest holders.

 Reduced COVID-19 pressures – About 30% of the U.S. population has been fully vaccinated, and about 43% have received at least one dose. Government stimulus measures appear likely to support capital markets and near-term economic growth.

 Balance sheet strength – We estimate average excess capital at 16% of 4Q20 adjusted book value (BV), and liquidity at 21% of BV.

 Excellent risk management – Credit losses/migration to-date have been manageable and less than initially expected. Increasing credit and economic certainty should drive more deployment of capital, likely via share repurchases.