We're gonna forecast the DAC asset for Generali, and to do that, we're gonna need these assumptions here, which will help us to calculate the amount of capitalized DAC and the amount of amortization on the DAC. Now, note that the amount of capitalized DAC is based on the gross written premiums for the life business and that's because for Generali, their DAC arises primarily on their life business. Now, in terms of the approach we're gonna use for forecasting a DAC, we're gonna do it in exactly the same way as we would for intangibles. So that means using our base calculation, so starting with our beginning DAC balance, adding to it any capitalized DAC, and then deducting any amortized DAC. And that will give us our ending DAC balance. So let's go to our calculation section of our model to build our DAC calculation.

Now helpfully, we already have our ending DAC asset for our prior year already anchored to our balance sheet and we can use that as the beginning balance on our first forecast year's DAC. Now we need to add to that the capitalized DAC. And to do that, we're gonna need our assumptions from above.

And we can take that 1% and multiply it by the life gross written premiums, which we've already calculated.

So there, we've got our capitalized DAC. Now we just need to work out the amount of amortization on that. And again, we're gonna need to go back to our assumptions for that.

So our amortization is calculated based on our opening DAC balance. So we just take that 20% and apply it to our beginning DAC asset. And now what we need to do is sum those together to give our ending DAC asset. Now, we're only calculating it for the first forecast year at the moment. And when we finish building our balance sheet, we can roll forward all our calculations then. But there's one more thing that we're gonna need to do, which is to pop our DAC asset into our balance sheet.

So I'll grab that from our calculations above. And now we can see that we have our DAC assets sitting nicely in our balance sheet.