Abstract: Smart Reply (SR) systems present a user with a set of replies, of which one can be selected in place of having to type out a response. To perform well at this task, a system should be able to effectively present the user with a diverse set of options, to maximise the chance that at least one of them conveys the user's desired response. This is a significant challenge, due to the lack of datasets containing sets of responses to learn from. Resultantly, previous work has focused largely on post-hoc diversification, rather than explicitly learning to predict sets of responses. Motivated by this problem, we present a novel method \textsc{SimSR}, that employs model-based simulation to discover high-value response sets, through simulating possible user responses with a learned world model. Unlike previous approaches, this allows our method to directly optimise the end-goal of SR--maximising the relevance of at least one of the predicted replies. Empirically on two public datasets, when compared to SoTA baselines, our method achieves up to 21\% and 18\% improvement in ROUGE score and Self-ROUGE score respectively.