Ladies and gentlemen, welcome to the Reinsurance Group of America's Second Quarter 2013 Results Conference Call. Today's conference is being recorded. At this time, I would like to introduce the President and Chief Executive Officer, Mr. Greig Woodring; and Senior Executive Vice President and Chief Financial Officer, Mr. Jack Lay. Please go ahead, Mr. Lay.

Okay, thank you. Good morning and welcome to RGA's Second Quarter 2013 Conference Call. Joining me this morning are Greig Woodring, our CEO; as well as Alain Néemeh, who heads our Canada and Australia operations. I'll turn the call over to Greig after a quick reminder about forward-looking information and non-GAAP financial measures. Following Greig's prepared remarks, we'll open the line for your questions. To help you better understand RGA's business, we will make certain statements and discuss certain subjects during the call that will contain forward-looking information, including, among other things, investment performance, statements relating to projections of revenue or earnings and future financial performance and growth potential of RGA and its subsidiaries. Keep in mind that actual results could differ materially from expected results. A list of important factors that could cause actual results to differ materially from expected results is included in the earnings release we issued yesterday. In addition, during the course of this call, we will make comments on a pretax and after-tax basis for operating income, which is considered a non-GAAP financial measure under SEC regulations. We believe this measure better reflects the ongoing profitability and underlying trends of our business. Please refer to the tables in our press release and quarterly financial supplement for more information on this measure and reconciliations of operating income to net income for our various business segments. These documents and additional financial information may be found on our website on the Investor Relations portion of the website at rgare.com. With that, I'll turn the call over to Greig.

Thank you, Jack. Good morning, everyone. Thanks for joining us on a short notice this morning. I'm going to discuss the situation in Australia in depth then briefly cover our other operations. To begin, we're very disappointed with the charge we took in Australia where the group business, in particular, has been problematic for several years now. However, with our actions this quarter, we believe we have aggressively addressed the situation, such that our future earnings profile should be more stable. We have excess capital of approximately $200 million and expect to generate additional capital for future operating performance. Capital management will continue to be an area of focus. We have increased our dividend by 25% and also added $100 million additional capacity to our share buyback authorization. Turning now to Australia. As a reminder, with our Australian group business, we reinsure lump sum products, which include both mortality and total permanent disability, as well as a disability income protection, which pays a monthly benefit. A significant part of that group market driven by superannuation funds, which are mandatory retirement funds providing their members access to life and disability coverages. As a result of a recently completed claim study, we have substantially increased our liability position unlike previous increases, which generally recognize elevated claims levels. We -- and to the date of the analysis, this quarter increase also provides for continued expected deterioration throughout the guaranteed premium periods. In this most recent claims study, we examined the data more comprehensibly that we have in the past, reflected additional trending we've seen and continued to see in the Australian industry. And with this quarter's increase, we have effectively doubled our group liabilities, which now exceed $535 million. We believe, in other words, that we have aggressively dealt with the issue of…

[Operator Instructions] And we'll take our first question from Nigel Dally with Morgan Stanley.

So I hope you can discuss the implications of the charge for your plans to repurchase stock over the remainder of the year. You said in your comments that you remain opportunistic, but given excess capital is down to $300 million. Isn't rebuilding your buffer a key priority? And if that's true, would it be fair to say that any buybacks over the next couple of quarters would any be normal in nature?

Nigel, this is Jack. I'll take that question. Let me start with the buffer. We typically have commented in the past that we normally target a cushion in terms of excess capital of roughly $300 million. But we've also cautioned or tried to suggest in the past that, that's kind of a long-term goal that we don't feel it's a priority to maintain $300 million. And if there's opportunities to attractively deploy capital, whether it be through repurchase of stock at attractive prices, or deployment into the businesses for attractive returns, we would do that even if we don't yet have a $300 million cushion. So maybe that's another way of saying that in terms of the repurchase, we're happy to have in total $400 million total authorization. As you know, we've already bought back $230 million to-date. So we've been recently aggressive but the capital, or the redundant capital, that is the excess capital level, is down compared to where it was, 3 and 6 months ago. So we may be a little more selective in terms of the repurchase than we have been in the past. But it remains to be seen, we'll just have to weigh the opportunities as they present themselves.

Okay. Then just a follow-up on Australia and the underlying assumptions you've built in to be charge. You mentioned that you built in additional deterioration into the reserve that you established, can we get some detail as to exactly how much additional deterioration or any other details that you could provide will give the comfort that the reserve's established are now conservative.

Well, we'll let Allan Néemeh answer that one. Alain P. Néemeh: Yes, Nigel, I think, you can think of the additional deteriorations representing a material -- a majority of the reserves that we booked. A natural question could be, why is it that we've got such a big charge since Investor Day and essentially, we completed a very comprehensive claim study and the results, I will say, were materially worse than we expected. It was a result we took, as Greig alluded to, a much more aggressive approach this time around, you can think of it in terms of these 2 buckets. One, is reflecting the observed deterioration but then additionally, we've changed our expectation to allow for additional potential future deterioration on both the existing blocks. And we've also applied that to the premiums not yet received to the end of the premium guarantee periods. And so that latter part is the majority of the reserve increase.

Our next question will come from Erik Bass with Citi.

So I guess, first one, just a follow-up on the last point in terms of what changed from Investor Day when I think your comment was, you expected Australia to be modestly profitable in 2013. So was it something new that you saw in the market? Or was this a claims study that you had planned to undertake, but just hadn't completed at the time of Investor Day?

It's more of the latter. You can almost say that we're constantly doing claims studies when we get an update, but we were completing a major claims study. And it isn't so much that we saw a surge of actual claims as much as we saw older claims and an increase in incidents and when we triangle it out, we get a clear picture of continued deterioration.

I think it's also fair to add, so not only is there the increased incidence but there is the delay in reporting live[ph], which is increasing. We've also factored in additional industry information on the back of the results of our claims study.

Okay. And then if you could just touch a little bit more on the individual business in Australia. I think that had been weak this quarter and you've also seen some volatile results in recent quarters. Just talk about the confidence you have in reserves for that business. And just to clarify, I think you said that there was no adjustment for individual reserves this quarter, is that correct?

Yes, that is correct. So results this quarter were weak on the back of a couple of large claims. In terms of the reserving adequacy, we are -- we do believe the reserve is adequate. I did, however, mentioned that Investor Day that we are going through a repricing exercise of about 2/3 of that block of business and that's ongoing right now. But certainly, in terms of reserve adequacy, we're comfortable with the reserves that we have.

Next we move to Steven Schwartz with Raymond James & Associates. Steven D. Schwartz - Raymond James & Associates, Inc., Research Division: Australia and accounting, is this a premium deficiency reserve?

This is Jack. Yes, part of the total reserve does relate to what we would characterize as a premium deficiency reserve. Steven D. Schwartz - Raymond James & Associates, Inc., Research Division: So Jack, the accounting here I'm straining to remember, I mean, basically, you've already assumed the loss on this business. Does that -- I think if I got my accounting correct, does that imply that Australia should return to profitability in the near future just because of the accounting?

Well, I think a better way to look at it is that we wouldn't expect any additional reserve additions, that we've fully contemplated that sort of thing. But yes, when you think of a premium deficiency reserve or similar sorts of reserves, what that really means is we've extended the development of our loss ratios out into all the future premiums that we expect to receive. And essentially through booking additional reserves have recognized any potential loss for future -- that presumably accrue the future premiums. We've recognized that loss now. Steven D. Schwartz - Raymond James & Associates, Inc., Research Division: So the -- any loss comes out of the reserve, so basically, the in forces [ph] is going to be breakeven?

Yes. That would be right. Steven D. Schwartz - Raymond James & Associates, Inc., Research Division: Okay. All right, and then, if you can here -- I'm just trying to understand, I know from Investor Day, from listening to Investor Day that superannuation funds are extraordinarily important and they have some serious market power over there and obviously, they have more power than the sellers of the product. Is that what's going on here with the TPD product or is there something special about the TPD product because you've been stressing that you don't sell TPD in other places. You weren't stressing that there aren't superannuation funds in other places so if you can help on that? Alain P. Néemeh: So this is Alain. I think it's a bit of both. The industry funds certainly are large buyers of the business and as long as companies compete, that can drive prices down. I think, I think, one of the issues that with the TPD product is, if you go back in time, we saw a good profitability on this business through to the end of 2008. And right around that time, as Greig mentioned, there was some benefit improvement coverage increases, and frankly, pricing decreases as we go back and review our files and look at the industry activity. And it was all at the same time as the economic fallout started. I think we saw over time a more informed insured group and longer and longer reporting delays. And that's really the one I think that's driving a large part of the uncertainty because when you go back in time and look at the data that we used to price and then look at that data today, it's changed because of those lengthening reporting delays. It's fair to say we didn't catch that in the pricing. Steven D. Schwartz - Raymond James & Associates, Inc., Research Division: Okay. Alain, what is the difference between TPD and DI? Alain P. Néemeh: TPD is a lump sum payment on total permanent disability as opposed to the recurring payments that you would see with disability income. Steven D. Schwartz - Raymond James & Associates, Inc., Research Division: Okay. And then, if I may, one more. Just moving to the U.S., you noted in the press release, Jack or Greig, that the benefit ratio in the U.S. was pretty much similar to what it was a year ago, but in my notes, I have the year-ago results, you saying that they were adverse, unexpectedly adverse higher than the mortality results were worse than you would expect. Can you talk to this quarter?

Yes. Mortality was pretty much in line with the expectations this quarter, Steve. The benefit ratio is adverse. It's due to either the mix of business changing the acquisition costs or, and/or there's some administration noise coming through because of reporting.

We move next to John Nadel with Sterne Agee. John M. Nadel - Sterne Agee & Leach Inc., Research Division: I was hoping that you could help us understand maybe a little bit more granularity of the $274 million. I think it was pretax reserve increase in Australia. I think you mentioned that maybe a smaller portion of that reflects the experience that you've already viewed in terms of the deterioration of the business. And maybe a much larger portion of the $274 million reflects an expectation that there's further deterioration from here. Could you give us a little bit more granularity on that? How much of the $274 million is just taking us -- taking reserves to the level based on the experience that you've actually seen versus how much is on further deterioration expected?

So as [indiscernible] you can think of the existing deterioration as being about $50 million of that. And then the rest of it as being a further deterioration, as well as pushing that out through the premiums to be received right through to the end of the premium guarantee period. John M. Nadel - Sterne Agee & Leach Inc., Research Division: Okay. That's helpful. And can you just remind us what the -- from June 30, let's say, through the end of premium guarantee period, how much longer do we have to go? Alain P. Néemeh: We've got about $55 million. I mean -- and I'm talking now in terms of the big industry funds, which really are the majority of the problem. We've got about $55 million in premiums rolling off in November of this year, about $70 million, July 1, 2014, and then about $90 million, July 1, 2015.

We'll move now to Jeff Schuman with KBW Investments. Jeffrey R. Schuman - Keefe, Bruyette, & Woods, Inc., Research Division: I was wondering if we could get a little bit better understanding of the nature of the higher disability claims. I mean, clearly it has something to do with pricing and terms in underwriting. But I'm wondering to what extent there is actually a secular as you here as well. I think in the past, you've talked more about termination rates. I think now you're talking about higher incidence rates. So is there actually a secular change in Australia? Alain P. Néemeh: I think it's fair to say, yes. I mean, that we believe there has been what I would term a material dislocation in the underlying market. I just want to be clear, when we talk about termination rates, we're probably -- we're talking about the disability income monthly-type benefits. The TPD sort of one and done. So what we have -- we have seen increased incidence on TPD, but a larger part of the problem is the lengthening delays, where on average now, we're seeing about 2-year delays in reporting of claims but for one fund in particular, that's lengthened out to both 3.5, close to 4 years now. So in those terms, I think, that's probably the single biggest issues we would have missed when we go back in time and look at our pricing and it's not something that we appropriately contemplated. Frankly not something I think we would have expected. But that's part of the reason why we're suspending the quoting activity at this point because until we better understand what the underlying drivers are and how to fix that issue, this is just not a business that we want to continue participating in. Jeffrey R. Schuman - Keefe, Bruyette, & Woods, Inc., Research Division: Okay, then the follow-on, just to be clear what's happening on the renewals, you made it very clear that you're not quoting on new business, you've given us kind of a renewal schedule. So what is going to happen at these upcoming renewals, are you going to see big price increases or you're just going to let the business go? Or what is actually the strategy for those renewals?

Well there's a requirement in the Australian marketplace to provide renewal quotes, so we will be providing renewal quotes. However, if I go back to my earlier point, until we either influence a change in the underlying products or better understand the lengthening of the reporting delays, I think you can walk away thinking that we'll be unsuccessful in those renewals.

[Operator Instructions] We go next to Ryan Krueger with Dowling & Partners. Ryan Krueger - Dowling & Partners Securities, LLC: On Australia, it looked like outside of the reserve addition, there may have also been about $25 million loss in the remaining businesses. Was that all individual or was a percent of that group as well?

No. It's actually all individual, and I think in my numbers actually the number was slightly lower, it was a $17 million loss. It was all individual. Ryan Krueger - Dowling & Partners Securities, LLC: Okay. And then, just thinking about going forward, seems like you're -- if your projections come true in the group business, you're expecting essentially breakeven earnings there. But I guess, how should we think about the individual business? It seemed like -- has anything changed since Investor Day on the individual side or are you still expecting that to also be in the ballpark of breakeven near-term?

No, I would think of it in terms of breakeven, as we continue to go through our repricing exercise, which we would expect we'd have a better handle on where that lands us by the end of the year.

The individual business in Australia has exhibited a pretty volatile up-and-down pattern over different quarters. Sometimes it's been very good. Sometimes it's been very high but this particular quarter is not good.

We take our next question from Humphrey Lee at UBS.

Just another follow-up on the whole reserve deal issue. So how much of a buffer are you creating with this reserve. So in other words, under what circumstances will another reserve strengthening be necessary?

I think maybe Jack can address the question. But before that, I just want to say, I don't think we can ever say, we've got it all. But we have addressed it very aggressively. As I mentioned, we have recognized its existing deterioration. We've also assumed potential future deterioration, and again, right through the end of the guaranteed premium periods.

Yes. Humphrey, this is Jack. I would certainly agree with that. We don't look at it as setting up a reserve and then putting a buffer on top of that. But when we look at the underlying assumptions, that is the assumptions that underlie the reserve calculation. We think we have been very aggressive in setting those assumptions. So we end up with the reserve addition that we think accommodates the situation. We don't expect to be going back to the situation.

And so maybe like, think about in that way, in terms of future deterioration, are you kind of assuming at a worse pace than the current deterioration or kind of like, kind of -- try something that is more in line with what you're seeing the comfort out. [ph]

No, you can think of that further deterioration as, we take a look at all what we have experienced to-date, that is what we've observed historically. And then, we, in our assumptions, presume that it could get worse and markedly worse. So we've been -- in our view fairly aggressively looking at further deterioration, potential deterioration.

We'll move now to Sean Dargan at Macquarie.

I'm following up on Australia. The environmental factors you referred to, just to be clear, you're talking about the environment of the insurance market and pricing. And I asked the question because my colleagues in Australia said that there have been upticks in mental health claims. So I just want to make sure there's nothing going on in the actual environment that's causing mental illness?

No, I didn't mean to imply it. And I think when I talked about the environment, I talked about products that have perhaps gotten ahead of themselves, pricing that isn't commensurate with the risk on those products. You're correct that there has been an uptick in mental health claimants, but, no, I did not mean to imply that there was anything in the Australian environment that was causing mental health.

Got it. And I just one follow-up. Regarding the individual products in Australia, I think we've seen some local primary carriers, including AMP provision for future losses and they've cited incorrect assumptions around lapsation. I just want to get it from your mouths that we're not going to see another shoe drop on the individual side?

We do not believe -- let me say, we believe that we're adequately reserved and we have taken some lumps on individual in the past. But we don't believe there's anything coming.

We'll move now to Mark Finkelstein with Evercore.

Maybe just a couple other question, in thinking through this. I think, Greig, in the opening remarks, you talked about kind of missing a fundamental change in the market. But then you subsequently suggested that you aren't seeing anything in other parts of the world. And I guess, when you think about RGA, it's obviously a very broad company, a lot of different regions, some different products, mainly mortality-based, a lot of smaller areas that aren't fully developed yet. And I guess, the question I have is, how do you get comfortable that a situation like this isn't present in another part of the world that you just haven't figured out yet, and does this experience force you to change kind of how you manage the business, how you manage the company, how you think about risk management?

Good question, Mark. First of all, this situation is unique for a couple of reasons. First of all, the prominence of these superannuation funds and -- who are big purchasers of large transactions, does not exhibit itself in other markets that I can think of in anywhere close to the same sort of prominence. And this particular product is one that is sold commonly in Australia. It's bundled with life insurance. And nowhere else do you see this product sold in the same quantities or achieving the same level of prominence nor do we have big concentrations of it. So that's the basis of the comments we make. We, obviously, do look at everything we do and you're right, that we are into a lot of different markets all have their unique characteristics, they're unique distribution systems, they're unique products. And we have to have a very vigilant and active product development and risk management capability. In this particular case, in retrospect, as we sit here today, as several years ago, this business in Australia was, in my opinion, unpriceable. Because the data we had was irrelevant. It was changing under our feet in ways that we couldn't understand or anticipate. And the data we have had that was used to price was not only not helpful, it was actually misleading us. Because the world was changing in Australia. The patterns of claims were changing. People are coming much more aware of these benefits. There's been a cottage industry in trying to steer people to the superfunds, which give them the best benefit package for their particular needs. There's a lot of anti-select -- there's a lot of things going on in the market that changed. And so, while we've been in the market for more than a dozen years, that it went very well for a while, it's changed and it's become unpriceable in our opinion.

And I guess, just back to the individual business in Australia. Apologies if you have hit this pretty well. But I guess, what I'm still a little bit confused about is, did the experience that you showed in the quarter change your view on the individual business in Australia going forward from what you previously thought? Or is it kind of more volatility that you typically see and it's -- your repricing it to improve it but there's nothing that you saw that really changed. I guess, I'm trying to understand what has changed if anything to your outlook on the individual block?

Nothing fundamental has changed, Mark. It was not a good quarter. There were some large claims and you remember the second quarter last year was like that. Overall, the year for individual lump sum, business was pretty much as expected but it was up-and-down a lot last year. This is the analogue to the fourth quarter in North America. But there's a little bit potentially of seasonality in claims. At least we've seen it in the last couple of years. It was not a good quarter and every bit of new information does color our future outlook to some extent, but we had not had a fundamental shift in our understanding or our viewpoint on where this business is going longer-term. We recognize this is not a business without its challenges, and we're working through a lot of those, but it's not like the group business.

[Operator Instructions] We take a follow-up from John Nadel with Sterne Agee. John M. Nadel - Sterne Agee & Leach Inc., Research Division: I don't know why I got cut-off so quickly. The -- I guess the follow-up questions that I had were, I think upfront, Greig, you mentioned that x the charge, you viewed EPS in the quarter at around $1.70. I don't get that number. I get to something more in the $1.54, $1.55 range. I was just hoping you could reconcile the 2. Is really the big difference there the individual DI losses in Australia is on top of the reserve charge?

Yes, John, let me take that. That's exactly right. The $1.70 is x Australia operations not just x the charge. John M. Nadel - Sterne Agee & Leach Inc., Research Division: Okay. X all of Australia.

And I would just clear, John, it's not the disability in Australia. It's more lump sum, more individual death [ph] claims points than. John M. Nadel - Sterne Agee & Leach Inc., Research Division: Okay, understood. And then my other question for you is just, I wanted to go back to the roll off of this business, the premiums coming off in July of '14, final level, final amount of premium coming off in July of '15, it sounded like -- can you just help us understand, do your liabilities remain ongoing from there or once the business -- once the premiums stop coming in, you are no longer on the hook for claims from that point forward? Alain P. Néemeh: We're certainly not on the hook for claims looking forward to the extent that the event date happens after the date we come off, but we have to sizable IBNR to deal with claims that haven't been reported. So any claims where the event date happens before, would be ours even if they're reported afterwards. John M. Nadel - Sterne Agee & Leach Inc., Research Division: So then maybe just the last question for you in terms of follow-up there is, when you think about the total reserves for this business, I think Greig mentioned earlier on in the call, something in the neighborhood of $530 million, what portion of that is IBNR? Alain P. Néemeh: It would be about 2/3.

And for our next follow-up question, we go again to Steven Schwartz with Raymond James & Associates. Steven D. Schwartz - Raymond James & Associates, Inc., Research Division: More on Australia. The individual adverse mortality, Greig, can you put a number on that? I guess, just mortality and morbidity.

Yes, mostly mortality, but I think it's about $17 million for the quarter. Steven D. Schwartz - Raymond James & Associates, Inc., Research Division: Okay. And Alain, if you can explain to us something you said kind of caught me by surprise, there's normally 2-year lag in the reporting of this TPD claims and you've got one fund that's having a 4-year lag. Why in the world does it take somebody 2 years or 4 years or whatever it is for a TPD claim? Alain P. Néemeh: That's definitely something that we've been struggling with over the last little while. You can maybe think about in terms sometimes of someone sort of going on disability and they go on short-term disability first and then they -- so that would be your monthly income benefit and they roll on to on a long-term disability benefit and then only after a certain period of time do they become totally and permanently disabled enough to claim the lump sum, but frankly, even with that in mind, the delays are extremely long and Greig alluded to sort of the cottage industry of lawyers looking for some of these older claims. It is one of the things I would say that we're aggressively working on to try and figure out how to rein that back in. But at this point, it does puzzle the mind a little bit to think why someone would wait that long to claim. Steven D. Schwartz - Raymond James & Associates, Inc., Research Division: Okay. And then -- the lawyers thing is interesting. And then just -- I mean, Sean kind of alluded to it maybe with the mental claims, there are reports at least, I'm not going to claim that I know that is going on in Australia, but there are reports at least that the economy is deteriorating over there. Do you see anything stemming from that?

Well that would have been worked into our estimates and changing view if you wish of the future deterioration that might occur.

And we go again to Humphrey Lee with UBS.

I just want to shift the topic a little bit. So looking at the Europe and South Africa, the U.K. mortality experience was weak this quarter, just kind of maybe you can quantify the track for the particular quarter?

Yes. Humphrey, this is Jack. Without putting to a fine a point on it, it was roughly $6 million.

Got it. And then back to Australia, just more from a background information, what is your market share in the TPD market in Australia?

I don't know that I have that. Our market share overall would be in the low 20s. And I expect that on TPD we'd probably be somewhat similar to that. But I don't know that I can point to a number. I don't know that we've got industry data enough to sort of come down on a market share for a particular benefit. Particularly as its our rider on life products.

Typically everything is packaged together.

And we take another question from Ryan Krueger with Dowling & Partners. Ryan Krueger - Dowling & Partners Securities, LLC: I guess, first, could you just quantify the dollar amount of reserves for the individual business in Australia?

I don't know if we have the individual total reserve, Ryan. We'll get back to you on that, though. John Hayden will get back to you. Ryan Krueger - Dowling & Partners Securities, LLC: Okay. And then I guess, related to that, I think lapse rate has been an ongoing issue on the individual business there. I guess, what can you tell us to get comfortable with the fact that -- I mean -- in other words, how was that been projected into the existing reserves and is there any potential that, as you continue to study what's going on in the individual side that you may need to make changes in projection on things like -- things like lapse rate that could have yet similar impacts to -- after you further studied the group business? Alain P. Néemeh: I think what I'll say to that Ryan is, going back to the Investor Day comments, we are going through a repricing exercise on that business. One of the key factors, though, I think that's very different on the individual side is, we have confidence in the underlying data that we're using, to price and to move forward and we don't see the reporting lags that we're seeing in this group TPD business. So I don't -- my perspective is, as I said earlier, we're comfortable with the reserving and we do not believe that there's something lurking in the background that we're not aware of.

And we move now to Jeff Schuman with KBW Investments. Jeffrey R. Schuman - Keefe, Bruyette, & Woods, Inc., Research Division: Just one for the clarification of -- I look forward to the additional reserve data that you just mentioned to Ryan, but to be clear, the $530 that is the total group reserve. Is that what the $530 is?

Correct. Jeffrey R. Schuman - Keefe, Bruyette, & Woods, Inc., Research Division: Okay, that's what that is. Okay. And then on capital management, in very active buying back stock this year, does that reflect less availability of kind of interesting transactions, or is it more the case that there really are some pretty relevant transactions but when you sort of penciled everything out, that the share repurchase was just a better way to go?

Yes, Jeff, this is Jack. I think the way you should look at that is, we still have a fairly broad array of potential M&A or block deals that we are constantly reviewing. So that hasn't changed in any meaningful way. But as you know, it's very difficult to project if we'll execute, if we'll be successful on so on and so forth. So we don't want to be in the mode of continually waiting to see which block deals will be attractive and which we think we can execute and when and so on and so forth. So we've been, as you suggested, more active in terms of deploying capital into buybacks. We also think we have some degree of financing availability. So that if we did have, for instance, a block transaction that was relatively sizable that we thought was attractive, we think we can add further financing to attract that. And when I say financing, I'm really not talking about equity issuance. I'm talking about senior debt and hybrid issuance.

Next we take a follow-up from John Nadel with Sterne Agee. John M. Nadel - Sterne Agee & Leach Inc., Research Division: I think this is the first call I've ever done a second follow-up on. And the question I wanted to ask is just a little bit more about how the TPD reinsurance works. Is this more like a Stop-Loss, where the primary insurance carriers are taking, let's say, the first I don't know $0.20 of losses on the $1 and RGA and maybe a few others are taking some level above that or is this a co-insurance type of arrangement where losses come in and you just get a certain percentage of them, and it doesn't matter whether it passes the threshold?

Yes, it's the latter, John. And it's always the case that the direct insurer has at least as much risk as we have. John M. Nadel - Sterne Agee & Leach Inc., Research Division: And then the question for you, just because I don't know a whole lot about this particular piece in the market in Australia. I mean, how many direct or primary writers are really active in this business. I think you mentioned that it's really a business that's coupled with group life so -- or packaged with group life, how many carriers are really in that business or maybe said a different way, how many carriers do you have reinsurance arrangements with? Alain P. Néemeh: It's probably, I think in terms of about 10 to 12 on the direct side in terms of who we do business with, a number that's slightly smaller than that. John M. Nadel - Sterne Agee & Leach Inc., Research Division: Any household names that we would know about?

Yes. You would know some of the names. Alain P. Néemeh: I'm sorry. I just wanted to come back on the individual reserve number, I have had some time to just look through my notes. About $250 million of individual reserves at the end of second quarter, of which about $160 million would be individual DI and the $90 million would be individual lump sum.

And then we have a question now from Sean Dargan with Macquarie.

I just want to follow-up on something Steven brought up and that's the economic environment. I think up until now, it's been over 2 decades since Australia was last in a recession. I mean, I'm just wondering what kind of assumptions you're baking in for adverse deviations if things get really worse from here, and the mines close, I mean, do you have any experience or can you look to what happened to the last time there was a recession to see what happened to TPD claims?

I am not sure we're on any miner groups, first of all. But the economy in Australia for a while has been very uneven. In places, it's been strong, in other places, it's been quite weak. And that's been the case since the financial crisis started. But we are factoring in all of our knowledge about what's going on in Australia and how it's changing into the reserve estimation that we did.

And that concludes today's question-and-answer session. I'd like to turn the call back over to you, Mr. Lay, for any additional or closing remarks.

Okay. Well thanks, everyone, who joined us on relatively short notice here. We appreciate the interest. And with that, we'll end the second quarter earnings call. Thank you very much.

Again, ladies and gentlemen, that concludes today's call. Thank you, everyone, for joining us.