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  • Corebridge Financial Announces Third Quarter 2024 Results

    November 5, 2024 by Corebridge Financial, Inc

    HOUSTON–(BUSINESS WIRE)–Corebridge Financial, Inc. (“Corebridge” or the “Company”) (NYSE: CRBG) today reported financial results for the third quarter ended September 30, 2024.

    Kevin Hogan, President and Chief Executive Officer of Corebridge, said, “We had a very strong quarter as Corebridge grew operating earnings per share by 31% year over year to $1.38. At the same time, we returned $848 million to shareholders through dividends and share repurchases, bringing the year-to-date payout ratio to 83%. We continue to create long-term value by leveraging our diversified business model, strong balance sheet and disciplined execution.

    “Our solid fundamentals and multiple sources of income give us the flexibility to perform across different business cycles. Corebridge maintains a compelling mix of fee income, spread income and underwriting margin, with all three again increasing year over year. Additionally, we grew premiums and deposits by 5% over the prior year quarter to $9.6 billion, capitalizing on market dynamics and the benefits of our broad product suite and distribution network. Last month we initiated the largest product launch in our Company’s history, expanding on what is already one of the broadest annuity platforms in the industry with our first registered index-linked annuity, or RILA.

    “Corebridge delivered attractive business results while maintaining a strong balance sheet supported by high-quality assets and liabilities, prudent risk management, and diversification. We remain focused on executing our strategies to create shareholder value and remain confident in the growth opportunities available to our four market-leading businesses as well as our ability to generate attractive returns across multiple market environments.”

    CONSOLIDATED RESULTS

     

     

     

    Three Months Ended
    September 30,

    ($ in millions, except per share data)

     

     

     

    2024

     

     

     

    2023

     

    Net income (loss) attributable to common shareholders

     

     

    $

    (1,184

    )

     

    $

    2,101

     

    Income (loss) per common share attributable to common shareholders

     

    $

    (2.02

    )

     

    $

    3.28

     

    Weighted average shares outstanding – diluted

     

     

     

    587.1

     

     

     

    641.0

     

    Adjusted after-tax operating income

     

     

    $

    810

     

     

    $

    675

     

    Operating EPS

     

     

    $

    1.38

     

     

    $

    1.05

     

    Weighted average shares outstanding – operating

     

     

     

    588.3

     

     

     

    641.0

     

    Book value per common share

     

     

    $

    23.69

     

     

    $

    13.21

     

    Adjusted book value per common share1

     

     

    $

    37.32

     

     

    $

    38.23

     

    Total common shares outstanding

     

     

     

    574.4

     

     

     

    633.5

     

    Pre-tax income (loss)

     

     

    $

    (1,594

    )

     

    $

    2,461

     

    Adjusted pre-tax operating income1

     

     

    $

    1,031

     

     

    $

    813

     

    Aggregate core sources of income

     

     

    $

    1,875

     

     

    $

    1,797

     

    Base spread income

     

     

    $

    927

     

     

    $

    918

     

    Fee income

     

     

    $

    537

     

     

    $

    485

     

    Underwriting margin excluding variable investment income

     

     

    $

    411

     

     

    $

    394

     

    Premiums and deposits

     

     

    $

    9,608

     

     

    $

    9,133

     

    Net investment income

     

     

    $

    3,296

     

     

    $

    2,657

     

    Net investment income (APTOI basis)1

     

     

    $

    2,834

     

     

    $

    2,456

     

    Base portfolio income – insurance operating businesses

     

     

    $

    2,726

     

     

    $

    2,428

     

    Variable investment income2 – insurance operating businesses

     

     

    $

    117

     

     

    $

    37

     

    Corporate and other4

     

     

    $

    (9

    )

     

    $

    (9

    )

     

     

     

     

     

     

    Return on average equity

     

     

     

    (38.5

    %)

     

     

    88.8

    %

    Adjusted return on average equity1

     

     

     

    14.7

    %

     

     

    11.4

    %

                       

    Net loss was $1.2 billion compared to a gain of $2.1 billion in the prior year quarter. The change largely was a result of higher realized losses primarily driven by the Fortitude Re funds withheld embedded derivative. The Company completed its annual actuarial assumption review during the quarter which decreased pre-tax income by $79 million in the current year compared to a $22 million increase in the prior year.

    Adjusted pre-tax operating income (“APTOI”) was $1.0 billion, a 27% increase over the prior year quarter. Excluding variable investment income, APTOI grew 18% over the same period primarily as a result of higher aggregate core sources of income and expense efficiencies, along with favorable one-time notable items in the current year. The annual actuarial assumption review decreased APTOI by $3 million in the current year quarter compared to a $22 million increase in the prior year quarter.

    Premiums and deposits were $9.6 billion, a 5% increase over the prior year quarter. Excluding transactional activity (i.e., pension risk transfer, guaranteed investment contracts and Group Retirement plan acquisitions), premiums and deposits grew 20% over the same period primarily driven by an increase in fixed annuity deposits.

    Net investment income was $3.3 billion, a 24% increase over the prior year quarter, and net investment income on an APTOI basis was $2.8 billion, up 15% over the prior year quarter. This improvement was due in large part to higher base portfolio income, which grew $298 million, or 12%, over the prior year quarter. The increase in base portfolio income was supplemented by variable investment income which grew $80 million over the same period.

    CAPITAL AND LIQUIDITY HIGHLIGHTS

    • Life Fleet RBC ratio remained above target
    • Holding company liquidity of $2.0 billion as of September 30, 2024
    • Issued $750 million of fixed-to-fixed reset rate junior subordinated notes and repaid all of the $250 million aggregate principal amount outstanding under the three-year delayed draw term loan facility
    • Financial leverage ratio2 of 30.7% reflects the impact of pre-funding approximately $500 million of debt maturing in 2025
    • Returned $848 million to shareholders through $715 million of share repurchases and $133 million of dividends
    • Declared quarterly dividend of $0.23 per share of common stock on November 1, 2024, payable on December 31, 2024, to shareholders of record at the close of business on December 17, 2024

    BUSINESS RESULTS

    Individual Retirement

     

    Three Months Ended
    September 30,

    ($ in millions)

     

    2024

     

    2023

    Premiums and deposits

     

    $

    5,526

     

    $

    3,961

    Core sources of income  

    $

    1,006

     

    $

     951

    Spread income

     

    $

    729

     

    $

    672

    Base spread income

     

    $

    685

     

    $

    662

    Variable investment income

     

    $

    44

     

    $

    10

    Fee income

     

    $

    321

     

    $

    289

    Adjusted pre-tax operating income

     

    $

    657

     

    $

    576

       

     

           
    • Premiums and deposits increased $1.6 billion, or 40%, over the prior year quarter primarily driven by higher fixed annuity deposits
    • Core sources of income increased 6% over the prior year quarter as a result of general account growth from new business volume and higher sustained new money yields, along with separate account growth from higher account values
    • APTOI increased $81 million, or 14%, over the prior year quarter primarily due to higher variable investment income, fee income and base spread income, partially offset by higher expenses primarily arising from sales growth. Results were also impacted by a more favorable annual actuarial assumption review in the current year
         

    Group Retirement

     

    Three Months Ended
    S
    eptember 30,

    ($ in millions)

     

    2024

     

    2023

    Premiums and deposits

     

    $

    1,963

     

    $

    1,831

    Core sources of income  

    $

    350

     

    $

     372

    Spread income

     

    $

    176

     

    $

    209

    Base spread income

     

    $

    149

     

    $

    192

    Variable investment income

     

    $

    27

     

    $

    17

    Fee income

     

    $

    201

     

    $

    180

    Adjusted pre-tax operating income

     

    $

    188

     

    $

    192

                 
    • Premiums and deposits increased $132 million, or 7%, over the prior year quarter driven by higher in-plan and out-of-plan deposits
    • Core sources of income decreased 6% from the prior year quarter as a result of net outflows from older age cohorts, partially offset by higher account values and growing advisory and brokerage assets under administration
    • APTOI decreased $4 million, or 2%, from the prior year quarter primarily due to lower base spread income, partially offset by higher fee income and expense efficiencies
         

    Life Insurance

     

    Three Months Ended
    September 30,

    ($ in millions)

     

    2024

     

    2023

    Premiums and deposits

     

    $

    856

     

    $

    1,085

    Underwriting margin

     

    $

    392

     

    $

    384

    Underwriting margin excluding variable investment income

     

    $

    387

     

    $

    381

    Variable investment income

     

    $

    5

     

    $

    3

    Adjusted pre-tax operating income

     

    $

    156

     

    $

    136

                 
    • Underwriting margin increased 2% over the prior year quarter. Excluding variable investment income, the sale of the international businesses, and reinsurance recaptures, underwriting margin increased 2% over the prior year quarter driven by more favorable mortality experience
    • APTOI increased $20 million, or 15%, over the prior year quarter driven by more favorable mortality experience and the aforementioned recaptures. Results were also impacted by the annual actuarial assumption review which included a $29 million unfavorable impact in the current year compared to a $19 million favorable impact in the prior year
         

    Institutional Markets

     

    Three Months Ended
    September 30,

    ($ in millions)

     

    2024

     

    2023

    Premiums and deposits

     

    $

    1,263

     

    $

    2,256

    Core sources of income  

    $

    132

     

    $

     93

    Spread income

     

    $

    133

     

    $

    70

    Base spread income

     

    $

    93

     

    $

    64

    Variable investment income

     

    $

    40

     

    $

    6

    Fee income

     

    $

    15

     

    $

    16

    Underwriting margin

     

    $

    25

     

    $

    14

    Underwriting margin excluding variable investment income

     

    $

    24

     

    $

    13

    Variable investment income

     

    $

    1

     

    $

    1

    Adjusted pre-tax operating income

     

    $

    154

     

    $

    75

       

     

           
    • Premiums and deposits decreased $993 million, or 44%, from the prior year quarter largely driven by lower deposits from guaranteed investment contracts
    • Core sources of income increased 42% over the prior year quarter primarily as a result of higher base spread income due to growth in pension risk transfer reserves and guaranteed investment contracts
    • APTOI increased $79 million, or 105%, over the prior year quarter primarily due to higher base spread income and variable investment income. Results were also impacted by a more favorable annual actuarial assumption review in the current year and reinsurance recapture
         

    Corporate and Other

     

    Three Months Ended
    September 30,

    ($ in millions)

     

     

    2024

     

     

     

    2023

     

    Corporate expenses

     

    $

    (32

    )

     

    $

    (44

    )

    Interest on financial debt

     

    $

    (110

    )

     

    $

    (110

    )

    Asset management

     

    $

    39

     

     

    $

    5

     

    Consolidated investment entities

     

    $

    (10

    )

     

    $

    (1

    )

    Other

     

    $

    (11

    )

     

    $

    (16

    )

    Adjusted pre-tax operating (loss)

     

    $

    (124

    )

     

    $

    (166

    )

                     
    • APTOI increased $42 million over the prior year quarter primarily due to the sale of a legacy investment and lower corporate expenses driven by Corebridge Forward, our modernization program delivering both expense reduction and increased efficiency
     
    ____________________________

    1 This release refers to financial measures not calculated in accordance with generally accepted accounting principles (non-GAAP); definitions of non-GAAP measures and reconciliations to their most directly comparable GAAP measures can be found in “Non-GAAP Financial Measures” below

    2 This release refers to key operating metrics and key terms. Information about these metrics and terms can be found in “Key Operating Metrics and Key Terms” below

    3 Excludes international life business

    4 Includes consolidations and eliminations

     

    CONFERENCE CALL

    Corebridge will host a conference call on Tuesday, November 5, 2024, at 11:00 a.m. EST to review these results. The call is open to the public and can be accessed via a live listen-only webcast in the Investors section of corebridgefinancial.com. A replay will be available after the call at the same location.

    Supplemental financial data and our investor presentation are available in the Investors section of corebridgefinancial.com.

    About Corebridge Financial

    Corebridge Financial, Inc. makes it possible for more people to take action in their financial lives. With more than $410 billion in assets under management and administration as of September 30, 2024, Corebridge Financial is one of the largest providers of retirement solutions and insurance products in the United States. We proudly partner with financial professionals and institutions to help individuals plan, save for and achieve secure financial futures. For more information, visit corebridgefinancial.com and follow us on LinkedInYouTube and Instagram. These references with additional information about Corebridge have been provided as a convenience, and the information contained on such websites is not incorporated by reference into this press release.

    In the discussion below, “we,” “us” and “our” refer to Corebridge and its consolidated subsidiaries, unless the context refers solely to Corebridge as a corporate entity.

    CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION

    Certain statements in this press release and other publicly available documents may include statements of historical or present fact, which, to the extent they are not statements of historical or present fact, constitute “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by the use of words such as “expects,” “believes,” “anticipates,” “intends,” “seeks,” “aims,” “plans,” “assumes,” “estimates,” “projects,” “is optimistic,” “targets,” “should,” “would,” “could,” “may,” “will,” “shall” or variations of such words are generally part of forward-looking statements. Also, forward-looking statements include, without limitation, all matters that are not historical facts. Forward-looking statements are made based on management’s current expectations and beliefs concerning future developments and their potential effects upon Corebridge. There can be no assurance that future developments affecting Corebridge will be those anticipated by management.

    Any forward-looking statements included herein are not a guarantee of future performance and involve risks and uncertainties, and there are certain important factors that could cause actual results to differ, possibly materially, from expectations or estimates reflected or implied in such forward-looking statements, including, among others, risks related to:

    • changes in interest rates and changes to credit spreads, the deterioration of economic conditions, an economic slowdown or recession, changes in market conditions, weakening in capital markets, volatility in equity markets, inflationary pressures, pressures on the commercial real estate market, and geopolitical tensions, including the ongoing armed conflicts between Ukraine and Russia and in the Middle East;
    • unpredictability of the amount and timing of insurance liability claims;
    • uncertainty and unpredictability related to our reinsurance agreements with Fortitude Reinsurance Company Ltd and its performance of its obligations under these agreements;
    • our investment portfolio and concentration of investments, including risks related to realization of gross unrealized losses on fixed maturity securities and changes in investment valuations;
    • liquidity, capital and credit, including risks related to our ability to access funds from our subsidiaries, our ability to obtain financing on favorable terms or at all, our ability to incur indebtedness, our potential inability to refinance all or a portion of our existing indebtedness, the illiquidity of some of our investments, a downgrade in the insurer financial strength ratings of our insurance company subsidiaries or our credit ratings, and non-performance by counterparties;
    • the failure of third parties that we rely upon to provide and adequately perform certain business, operations, investment advisory, functional support and administrative services on our behalf, the availability of our critical technology systems, our risk management policies becoming ineffective, significant legal, governmental or regulatory proceedings, or our business strategy becoming ineffective;
    • our ability to compete effectively in a heavily regulated industry, in light of new domestic or international laws and regulations or new interpretations of current laws and regulations;
    • estimates and assumptions, including risks related to estimates or assumptions used in the preparation of our financial statements differing materially from actual experience, the effectiveness of our productivity improvement initiatives and impairments of goodwill;
    • the intense competition we face in each of our business lines and the technological changes, including the use of artificial intelligence, that may present new and intensified challenges to our business;
    • our inability to attract and retain key employees and highly skilled people needed to support our business;
    • our arrangements with Blackstone ISG-1 Advisors L.L.C. (“Blackstone IM”), BlackRock Financial Management, Inc. or any other asset manager we retain, including their historical performance not being indicative of the future results of our investment portfolio and the exclusivity of certain arrangements with Blackstone IM;
    • the impact of risks associated with the closing of the transaction by and among the Company, AIG and Nippon Life Insurance Company (“Nippon”), pursuant to which AIG agreed to sell approximately 20% of the Company’s common stock to Nippon;
    • our separation from AIG, including risks related to the replacement or replication of functions in a timely manner or at all and the loss of benefits from AIG’s global contracts, our inability to file a single U.S. consolidated income federal income tax return for a five-year period, challenges related to being a public company and limitations on our ability to use deferred tax assets to offset future taxable income; and
    • other factors discussed in “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2023, as well as our Quarterly Reports on Form 10-Q.

    Any forward-looking statement speaks only as of the date on which it is made, and we undertake no obligation to update or revise any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events, except as otherwise may be required by law. You are advised, however, to consult any further disclosures we make on related subjects in our filings with the Securities and Exchange Commission (“SEC”).

    NON-GAAP FINANCIAL MEASURES

    Throughout this release, we present our financial condition and results of operations in the way we believe will be most meaningful and representative of our business results. Some of the measurements we use are ‘‘non-GAAP financial measures’’ under SEC rules and regulations. We believe presentation of these non-GAAP financial measures allows for a deeper understanding of the profitability drivers of our business, results of operations, financial condition and liquidity. These measures should be considered supplementary to our results of operations and financial condition that are presented in accordance with GAAP and should not be viewed as a substitute for GAAP measures. The non-GAAP financial measures we present may not be comparable to similarly named measures reported by other companies.

    Adjusted pre-tax operating income (“APTOI”) is derived by excluding the items set forth below from income from operations before income tax. These items generally fall into one or more of the following broad categories: legacy matters having no relevance to our current businesses or operating performance; adjustments to enhance transparency to the underlying economics of transactions; and recording adjustments to APTOI that we believe to be common in our industry. We believe the adjustments to pre-tax income are useful for gaining an understanding of our overall results of operations.

    APTOI excludes the impact of the following items:

    FORTITUDE RE RELATED ADJUSTMENTS:

    The modified coinsurance (“modco”) reinsurance agreements with Fortitude Re transfer the economics of the invested assets supporting the reinsurance agreements to Fortitude Re. Accordingly, the net investment income on Fortitude Re funds withheld assets and the net realized gains (losses) on Fortitude Re funds withheld assets are excluded from APTOI. Similarly, changes in the Fortitude Re funds withheld embedded derivative are also excluded from APTOI.

    The ongoing results associated with the reinsurance agreement with Fortitude Re have been excluded from APTOI as these are not indicative of our ongoing business operations.

    INVESTMENT RELATED ADJUSTMENTS:

    APTOI excludes “Net realized gains (losses)”, except for gains (losses) related to the disposition of real estate investments. Net realized gains (losses), except for gains (losses) related to the disposition of real estate investments, are excluded as the timing of sales on invested assets or changes in allowances depend largely on market credit cycles and can vary considerably across periods. In addition, changes in interest rates may create opportunistic scenarios to buy or sell invested assets. Our derivative results, including those used to economically hedge insurance liabilities, or those recognized as embedded derivatives at fair value, are also included in Net realized gains (losses) and are similarly excluded from APTOI except earned income (periodic settlements and changes in settlement accruals) on derivative instruments used for non-qualifying (economic) hedges or for asset replication. Earned income on such economic hedges is reclassified from Net realized gains and losses to specific APTOI line items based on the economic risk being hedged (e.g., Net investment income and Interest credited to policyholder account balances).

    MARKET RISK BENEFIT ADJUSTMENTS (“MRBs”):

    Certain of our variable annuity, fixed annuity and fixed index annuity contracts contain guaranteed minimum withdrawal benefits (“GMWBs”) and/or guaranteed minimum death benefits (“GMDBs”) which are accounted for as MRBs. Changes in the fair value of these MRBs (excluding changes related to our own credit risk), including certain rider fees attributed to the MRBs, along with changes in the fair value of derivatives used to hedge MRBs are recorded through “Change in the fair value of MRBs, net” and are excluded from APTOI.

    Changes in the fair value of securities used to economically hedge MRBs are excluded from APTOI.

    OTHER ADJUSTMENTS:

    Other adjustments represent all other adjustments that are excluded from APTOI and includes the net pre-tax operating income (losses) from noncontrolling interests related to consolidated investment entities. The excluded adjustments include, as applicable:

    • restructuring and other costs related to initiatives designed to reduce operating expenses, improve efficiency and simplify our organization;
    • non-recurring costs associated with the implementation of non-ordinary course legal or regulatory changes or changes to accounting principles;
    • separation costs;
    • non-operating litigation reserves and settlements;
    • loss (gain) on extinguishment of debt, if any;
    • losses from the impairment of goodwill, if any; and
    • income and loss from divested or run-off business, if any.

    Adjusted after-tax operating income attributable to our common shareholders (“Adjusted After-tax Operating Income” or “AATOI”) is derived by excluding the tax effected APTOI adjustments described above, as well as the following tax items from net income attributable to us:

    • reclassifications of disproportionate tax effects from AOCI, changes in uncertain tax positions and other tax items related to legacy matters having no relevance to our current businesses or operating performance; and
    • deferred income tax valuation allowance releases and charges.

    Adjusted Book Value is derived by excluding AOCI, adjusted for the cumulative unrealized gains and losses related to Fortitude Re’s funds withheld assets. We believe this measure is useful to investors as it eliminates the asymmetrical impact resulting from changes in fair value of our available-for-sale securities portfolio for which there is largely no offsetting impact for certain related insurance liabilities that are not recorded at fair value with changes in fair value recorded through OCI. It also eliminates asymmetrical impacts where our own credit non-performance risk is recorded through OCI. In addition, we adjust for the cumulative unrealized gains and losses related to Fortitude Re’s funds withheld assets since these fair value movements are economically transferred to Fortitude Re.

    Adjusted Book Value per Common Share is computed as adjusted book value divided by total common shares outstanding.

    Adjusted Return on Average Equity (“Adjusted ROAE”) is derived by dividing AATOI by average Adjusted Book Value and is used by management to evaluate our recurring profitability and evaluate trends in our business. We believe this measure is useful to investors as it eliminates the asymmetrical impact resulting from changes in fair value of our available-for-sale securities portfolio for which there is largely no offsetting impact for certain related insurance liabilities that are not recorded at fair value with changes in fair value recorded through OCI. It also eliminates asymmetrical impacts where our own credit non-performance risk is recorded through OCI. In addition, we adjust for the cumulative unrealized gains and losses related to Fortitude Re’s funds withheld assets since these fair value movements are economically transferred to Fortitude Re.

    Adjusted revenues exclude Net realized gains (losses) except for gains (losses) related to the disposition of real estate investments, income from non-operating litigation settlements (included in Other income for GAAP purposes) and changes in fair value of securities used to hedge guaranteed living benefits (included in Net investment income for GAAP purposes).

    Net investment income (APTOI basis) is the sum of base portfolio income and variable investment income.

    Operating Earnings per Common Share (“Operating EPS”) is derived by dividing AATOI by weighted average diluted shares.

    Premiums and deposits is a non-GAAP financial measure that includes direct and assumed premiums received and earned on traditional life insurance policies and life-contingent payout annuities, as well as deposits received on universal life insurance, investment-type annuity contracts and GICs. We believe the measure of premiums and deposits is useful in understanding customer demand for our products, evolving product trends and our sales performance period over period.

    KEY OPERATING METRICS AND KEY TERMS

    Assets Under Management and Administration

    • Assets Under Management (“AUM”) include assets in the general and separate accounts of our subsidiaries that support liabilities and surplus related to our life and annuity insurance products.
    • Assets Under Administration (“AUA”) include Group Retirement mutual fund assets and other third-party assets that we sell or administer and the notional value of Stable Value Wrap (“SVW”) contracts.
    • Assets Under Management and Administration (“AUMA”) is the cumulative amount of AUM and AUA.

    Base net investment spread means base yield less cost of funds, excluding the amortization of deferred sales inducement assets.

    Base spread income means base portfolio income less interest credited to policyholder account balances, excluding the amortization of deferred sales inducement assets.

    Base yield means the returns from base portfolio income including accretion and impacts from holding cash and short-term investments.

    Core sources of income means the sum of base spread income, fee income and underwriting margin, excluding variable investment income.

    Cost of funds means the interest credited to policyholders excluding the amortization of deferred sales inducement assets.

    Fee and Spread Income and Underwriting Margin

    • Fee income is defined as policy fees plus advisory fees plus other fee income. For our Institutional Markets segment, its SVW products generate fee income.
    • Spread income is defined as net investment income less interest credited to policyholder account balances, exclusive of amortization of deferred sales inducement assets. Spread income is comprised of both base spread income and variable investment income. For our Institutional Markets segment, its structured settlements, PRT and GIC products generate spread income, which includes premiums, net investment income, less interest credited and policyholder benefits and excludes the annual assumption update.
    • Underwriting margin for our Life Insurance segment includes premiums, policy fees, other income, net investment income, less interest credited to policyholder account balances and policyholder benefits and excludes the annual assumption update. For our Institutional Markets segment, its Corporate Markets products generate underwriting margin, which includes premiums, net investment income, policy and advisory fee income, less interest credited and policyholder benefits and excludes the annual assumption update.

    Financial leverage ratio means the ratio of financial debt to the sum of financial debt plus Adjusted Book Value plus non-redeemable noncontrolling interests.

    Life Fleet RBC Ratio

    • Life Fleet means American General Life Insurance Company (“AGL”), The United States Life Insurance Company in the City of New York (“USL”) and The Variable Annuity Life Insurance Company (“VALIC”).
    • Life Fleet RBC Ratio is the risk-based capital (“RBC”) ratio for the Life Fleet RBC ratios are quoted using the Company Action Level.

    Net Investment Income

    • Base portfolio income includes interest, dividends and foreclosed real estate income, net of investment expenses and non-qualifying (economic) hedges.
    • Variable investment income includes call and tender income, commercial mortgage loan prepayments, changes in market value of investments accounted for under the fair value option, interest received on defaulted investments (other than foreclosed real estate), income from alternative investments and other miscellaneous investment income, including income of certain partnership entities that are required to be consolidated. Alternative investments include private equity funds which are generally reported on a one-quarter lag.

    RECONCILIATIONS

    The following tables present a reconciliation of pre-tax income (loss)/net income (loss) attributable to Corebridge to adjusted pre-tax operating income (loss)/adjusted after-tax operating income (loss) attributable to Corebridge:

    Three Months Ended September 30,

    2024

    2023

    (in millions)

    Pre-tax

    Total Tax
    (Benefit)
    Charge

    Non-
    controlling
    Interests

    After Tax

    Pre-tax

    Total Tax
    (Benefit)
    Charge

    Non-
    controlling
    Interests

    After Tax

    Pre-tax income (loss)/net income (loss),
    including noncontrolling interests

    $

    (1,594

    )

    $

    (407

    )

    $

     

    $

    (1,187

    )

    $

    2,461

     

    $

    392

     

    $

     

    $

    2,069

     

    Noncontrolling interests

     

     

     

     

     

    3

     

     

    3

     

     

     

     

     

     

    32

     

     

    32

     

    Pre-tax income (loss)/net income (loss)
    attributable to Corebridge

     

    (1,594

    )

     

    (407

    )

     

    3

     

     

    (1,184

    )

     

    2,461

     

     

    392

     

     

    32

     

     

    2,101

     

    Fortitude Re related items

     

     

     

     

     

     

     

     

    Net investment (income) on Fortitude Re funds
    withheld assets

     

    (515

    )

     

    (110

    )

     

     

     

    (405

    )

     

    (233

    )

     

    (52

    )

     

     

     

    (181

    )

    Net realized (gains) losses on Fortitude Re funds
    withheld assets

     

    (157

    )

     

    (34

    )

     

     

     

    (123

    )

     

    228

     

     

    51

     

     

     

     

    177

     

    Net realized (gains) losses on Fortitude Re funds
    withheld embedded derivative

     

    1,509

     

     

    324

     

     

     

     

    1,185

     

     

    (1,080

    )

     

    (239

    )

     

     

     

    (841

    )

    Subtotal Fortitude Re related items

     

    837

     

     

    180

     

     

     

     

    657

     

     

    (1,085

    )

     

    (240

    )

     

     

     

    (845

    )

    Other reconciling Items

     

     

     

     

     

     

     

     

    Reclassification of disproportionate tax effects
    from AOCI and other tax adjustments

     

     

     

    (22

    )

     

     

     

    22

     

     

     

     

    (6

    )

     

     

     

    6

     

    Deferred income tax valuation allowance
    (releases) charges

     

     

     

    91

     

     

     

     

    (91

    )

     

     

     

    57

     

     

     

     

    (57

    )

    Changes in fair value of market risk benefits,
    net

     

    603

     

     

    126

     

     

     

     

    477

     

     

    (418

    )

     

    (88

    )

     

     

     

    (330

    )

    Changes in fair value of securities used to
    hedge guaranteed living benefits

     

    2

     

     

    1

     

     

     

     

    1

     

     

    4

     

     

    1

     

     

     

     

    3

     

    Changes in benefit reserves related to net
    realized (losses)

     

    (2

    )

     

    (1

    )

     

     

     

    (1

    )

     

    (2

    )

     

     

     

     

     

    (2

    )

    Net realized (gains) losses(1)

     

    1,093

     

     

    235

     

     

     

     

    858

     

     

    (332

    )

     

    (70

    )

     

     

     

    (262

    )

    Separation costs

     

     

     

     

     

     

     

     

     

    64

     

     

    13

     

     

     

     

    51

     

    Restructuring and other costs

     

    87

     

     

    18

     

     

     

     

    69

     

     

    82

     

     

    17

     

     

     

     

    65

     

    Non-recurring costs related to regulatory or
    accounting changes

     

    1

     

     

     

     

     

     

    1

     

     

    6

     

     

    2

     

     

     

     

    4

     

    Net (gain) loss on divestiture

     

    1

     

     

     

     

     

     

    1

     

     

    1

     

     

    60

     

     

     

     

    (59

    )

    Pension expense – non operating

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Noncontrolling interests

     

    3

     

     

     

     

    (3

    )

     

     

     

    32

     

     

     

     

    (32

    )

     

     

    Subtotal Non-Fortitude Re reconciling items

     

    1,788

     

     

    448

     

     

    (3

    )

     

    1,337

     

     

    (563

    )

     

    (14

    )

     

    (32

    )

     

    (581

    )

    Total adjustments

     

    2,625

     

     

    628

     

     

    (3

    )

     

    1,994

     

     

    (1,648

    )

     

    (254

    )

     

    (32

    )

     

    (1,426

    )

    Adjusted pre-tax operating income/Adjusted
    after-tax operating income attributable to
    Corebridge

    $

    1,031

     

    $

    221

     

    $

     

    $

    810

     

    $

    813

     

    $

    138

     

    $

     

    $

    675

     

    (1) Includes all net realized gains and losses except earned income (periodic settlements and changes in settlement accruals) on derivative instruments used for non-qualifying (economic) hedging or for asset replication. Additionally, gains (losses) related to the disposition of real estate investments are also excluded from this adjustment

     
     

    The following table presents Corebridge’s adjusted pre-tax operating income by segment:

    (in millions)

    Individual
    Retirement

    Group
    Retirement

    Life
    Insurance

    Institutional
    Markets

    Corporate &
    Other

    Eliminations

    Total
    Corebridge

    Three Months Ended September 30, 2024

     

     

     

     

     

     

     

    Premiums

    $

    36

    $

    5

    $

    352

    $

    208

    $

    17

     

    $

     

    $

    618

    Policy fees

     

    205

     

    113

     

    360

     

    50

     

     

     

     

     

    728

    Net investment income

     

    1,461

     

    478

     

    336

     

    568

     

    (5

    )

     

    (4

    )

     

    2,834

    Net realized gains (losses)(1)

     

     

     

     

     

    53

     

     

     

     

    53

    Advisory fee and other income

     

    116

     

    88

     

    81

     

    6

     

    9

     

     

     

     

    300

    Total adjusted revenues

     

    1,818

     

    684

     

    1,129

     

    832

     

    74

     

     

    (4

    )

     

    4,533

    Policyholder benefits

     

    21

     

    9

     

    687

     

    435

     

     

     

     

     

    1,152

    Interest credited to policyholder account balances

     

    744

     

    305

     

    84

     

    215

     

     

     

     

     

    1,348

    Amortization of deferred policy acquisition costs

     

    153

     

    21

     

    82

     

    4

     

     

     

     

     

    260

    Non-deferrable insurance commissions

     

    99

     

    30

     

    7

     

    5

     

     

     

     

     

    141

    Advisory fee expenses

     

    38

     

    34

     

    1

     

     

     

     

     

     

    73

    General operating expenses

     

    106

     

    97

     

    112

     

    19

     

    71

     

     

    (1

    )

     

    404

    Interest expense

     

     

     

     

     

    132

     

     

    (5

    )

     

    127

    Total benefits and expenses

     

    1,161

     

    496

     

    973

     

    678

     

    203

     

     

    (6

    )

     

    3,505

    Noncontrolling interests

     

     

     

     

     

    3

     

     

     

     

    3

    Adjusted pre-tax operating income (loss)

    $

    657

    $

    188

    $

    156

    $

    154

    $

    (126

    )

    $

    2

     

    $

    1,031

                   
                   

    (in millions)

    Individual
    Retirement

    Group
    Retirement

    Life
    Insurance

    Institutional
    Markets

    Corporate &
    Other

    Eliminations

    Total
    Corebridge

    Three Months Ended September 30, 2023

     

     

     

     

     

     

     

    Premiums

    $

    29

    $

    6

    $

    449

    $

    200

    $

    19

     

    $

     

    $

    703

     

    Policy fees

     

    182

     

    102

     

    371

     

    47

     

     

     

     

     

    702

     

    Net investment income

     

    1,240

     

    504

     

    313

     

    408

     

    (2

    )

     

    (7

    )

     

    2,456

     

    Net realized gains (losses)(1)

     

     

     

     

     

    (5

    )

     

     

     

    (5

    )

    Advisory fee and other income

     

    107

     

    78

     

    29

     

    1

     

    10

     

     

     

     

    225

     

    Total adjusted revenues

     

    1,558

     

    690

     

    1,162

     

    656

     

    22

     

     

    (7

    )

     

    4,081

     

    Policyholder benefits

     

    29

     

    12

     

    673

     

    389

     

     

     

     

     

    1,103

     

    Interest credited to policyholder account balances

     

    582

     

    298

     

    86

     

    165

     

     

     

     

     

    1,131

     

    Amortization of deferred policy acquisition costs

     

    150

     

    21

     

    95

     

    2

     

     

     

     

     

    268

     

    Non-deferrable insurance commissions

     

    90

     

    29

     

    22

     

    5

     

     

     

     

     

    146

     

    Advisory fee expenses

     

    35

     

    29

     

    1

     

     

     

     

     

     

    65

     

    General operating expenses

     

    96

     

    109

     

    149

     

    20

     

    85

     

     

     

     

    459

     

    Interest expense

     

     

     

     

     

    132

     

     

    (4

    )

     

    128

     

    Total benefits and expenses

     

    982

     

    498

     

    1,026

     

    581

     

    217

     

     

    (4

    )

     

    3,300

     

    Noncontrolling interests

     

     

     

     

     

    32

     

     

     

     

    32

     

    Adjusted pre-tax operating income (loss)

    $

    576

    $

    192

    $

    136

    $

    75

    $

    (163

    )

    $

    (3

    )

    $

    813

     

    (1) Net realized gains (losses) includes the gains (losses) related to the disposition of real estate investments

     

    The following table presents a summary of Corebridge’s spread income, fee income and underwriting margin:

     

    Three Months Ended September 30,

    (in millions)

    2024

     

    2023

    Individual Retirement

     

     

     

    Spread income

    $

    729

     

    $

    672

    Fee income

     

    321

     

     

    289

    Total Individual Retirement

     

    1,050

     

     

    961

    Group Retirement

     

     

     

    Spread income

     

    176

     

     

    209

    Fee income

     

    201

     

     

    180

    Total Group Retirement

     

    377

     

     

    389

    Life Insurance

     

     

     

    Underwriting margin

     

    392

     

     

    384

    Total Life Insurance

     

    392

     

     

    384

    Institutional Markets

     

     

     

    Spread income

     

    133

     

     

    70

    Fee income

     

    15

     

     

    16

    Underwriting margin

     

    25

     

     

    14

    Total Institutional Markets

     

    173

     

     

    100

    Total

     

     

     

    Spread income

     

    1,038

     

     

    951

    Fee income

     

    537

     

     

    485

    Underwriting margin

     

    417

     

     

    398

    Total

    $

    1,992

     

    $

    1,834

           

    The following table presents Life Insurance underwriting margin:

     

    Three Months Ended September 30,

    (in millions)

     

    2024

     

     

     

    2023

     

    Premiums

    $

    352

     

     

    $

    449

     

    Policy fees

     

    360

     

     

     

    371

     

    Net investment income

     

    336

     

     

     

    313

     

    Other income

     

    81

     

     

     

    29

     

    Policyholder benefits

     

    (687

    )

     

     

    (673

    )

    Interest credited to policyholder account balances

     

    (84

    )

     

     

    (86

    )

    Less: Impact of annual actuarial assumption update

     

    34

     

     

     

    (19

    )

    Underwriting margin

    $

    392

     

     

    $

    384

     

                   

    The following table presents Institutional Markets spread income, fee income and underwriting margin:

     

    Three Months Ended September 30,

    (in millions)

     

    2024

     

     

     

    2023

     

    Premiums

    $

    217

     

     

    $

    209

     

    Net investment income

     

    531

     

     

     

    373

     

    Policyholder benefits

     

    (418

    )

     

     

    (375

    )

    Interest credited to policyholder account balances

     

    (187

    )

     

     

    (137

    )

    Less: Impact of annual actuarial assumption update

     

    (10

    )

     

     

     

    Spread income(1)

    $

    133

     

     

    $

    70

     

    SVW fees

     

    15

     

     

     

    16

     

    Fee income

    $

    15

     

     

    $

    16

     

    Premiums

     

    (9

    )

     

     

    (9

    )

    Policy fees (excluding SVW)

     

    35

     

     

     

    31

     

    Net investment income

     

    37

     

     

     

    35

     

    Other income

     

    6

     

     

     

    1

     

    Policyholder benefits

     

    (17

    )

     

     

    (14

    )

    Interest credited to policyholder account balances

     

    (28

    )

     

     

    (28

    )

    Less: Impact of annual actuarial assumption update

     

    1

     

     

     

    (2

    )

    Underwriting margin(2)

    $

    25

     

     

    $

    14

     

    (1) Represents spread income from Pension Risk Transfer, Guaranteed Investment Contracts and Structured Settlement products
    (2) Represents underwriting margin from Corporate Markets products, including corporate-and bank-owned life insurance, private placement variable universal life insurance and private placement variable annuity products

     

    The following table presents Operating EPS:

     

    Three Months Ended September 30,

    (in millions, except per common share data)

     

    2024

     

     

     

    2023

     

    GAAP Basis

     

     

     

    Numerator for EPS

     

     

     

    Net income (loss)

    $

    (1,187

    )

     

    $

    2,069

     

    Less: Net income (loss) attributable to noncontrolling interests

     

    (3

    )

     

     

    (32

    )

    Net income (loss) attributable to Corebridge common shareholders

    $

    (1,184

    )

     

    $

    2,101

     

     

     

     

     

    Denominator for EPS

     

     

     

    Weighted average common shares outstanding – basic(1)

     

    587.1

     

     

     

    639.0

     

    Dilutive common shares(2)

     

     

     

     

    2.0

     

    Weighted average common shares outstanding – diluted

     

    587.1

     

     

     

    641.0

     

     

     

     

     

    Income per common share attributable to Corebridge common shareholders

     

     

     

    Common stock – basic

    $

    (2.02

    )

     

    $

    3.29

     

    Common stock – diluted

    $

    (2.02

    )

     

    $

    3.28

     

     

     

     

     

    Operating Basis

     

     

     

    Adjusted after-tax operating income attributable to Corebridge common shareholders

    $

    810

     

     

    $

    675

     

    Weighted average common shares outstanding – diluted

     

    588.3

     

     

     

    641.0

     

    Operating earnings per common share

    $

    1.38

     

     

    $

    1.05

     

    (1) Includes vested shares under our share-based employee compensation plans
    (2) Potential dilutive common shares include our share-based employee compensation plans

     

    The following table presents the reconciliation of Adjusted Book Value:

    At Period End

    September 30,
    2024

     

    June 30,
    2024

     

    September 30,
    2023

    (in millions, except per share data)

     

     

    Total Corebridge shareholders’ equity (a)

    $

    13,608

     

     

    $

    10,996

     

     

    $

    8,366

     

    Less: Accumulated other comprehensive income (AOCI)

     

    (9,884

    )

     

     

    (14,508

    )

     

     

    (19,294

    )

    Add: Cumulative unrealized gains and losses related to Fortitude Re funds withheld assets

     

    (2,058

    )

     

     

    (2,721

    )

     

     

    (3,439

    )

    Total adjusted book value (b)

    $

    21,434

     

     

    $

    22,783

     

     

    $

    24,221

     

    Total common shares outstanding (c)(1)

     

    574.4

     

     

     

    600.3

     

     

     

    633.5

     

    Book value per common share (a/c)

    $

    23.69

     

     

    $

    18.32

     

     

    $

    13.21

     

    Adjusted book value per common share (b/c)

    $

    37.32

     

     

    $

    37.95

     

     

    $

    38.23

     

    (1) Total common shares outstanding are presented net of treasury stock

     

    The following table presents the reconciliation of Adjusted ROAE:

     

    Three Months Ended September 30,

    (in millions, unless otherwise noted)

     

    2024

     

     

     

    2023

     

    Actual or annualized net income (loss) attributable to Corebridge shareholders (a)

    $

    (4,736

    )

     

    $

    8,404

     

    Actual or annualized adjusted after-tax operating income attributable to Corebridge shareholders (b)

     

    3,240

     

     

     

    2,700

     

    Average Corebridge Shareholders’ equity (c)

     

    12,302

     

     

     

    9,464

     

    Less: Average AOCI

     

    (12,196

    )

     

     

    (17,238

    )

    Add: Average cumulative unrealized gains and losses related to Fortitude Re funds withheld assets

     

    (2,390

    )

     

     

    (3,004

    )

    Average Adjusted Book Value (d)

    $

    22,108

     

     

    $

    23,698

     

    Return on Average Equity (a/c)

    (38.5

    )%

     

    88.8

    %

    Adjusted ROAE (b/d)

    14.7

    %

     

    11.4

    %

               

    The following table presents a reconciliation of net investment income (net income basis) to net investment income (APTOI basis):

     

    Three Months Ended September 30,

    (in millions)

     

    2024

     

     

     

    2023

     

    Net investment income (net income basis)

    $

    3,296

     

     

    $

    2,657

     

    Net investment (income) on Fortitude Re funds withheld assets

     

    (515

    )

     

     

    (233

    )

    Change in fair value of securities used to hedge guaranteed living benefits

     

    (13

    )

     

     

    (14

    )

    Other adjustments

     

    (6

    )

     

     

    (7

    )

    Derivative income recorded in net realized gains (losses)

     

    72

     

     

     

    53

     

    Total adjustments

     

    (462

    )

     

     

    (201

    )

    Net investment income (APTOI basis)

    $

    2,834

       

    $

    2,456

     
                   

    The following table presents the premiums and deposits:

     

    Three Months Ended September 30,

    (in millions)

     

    2024

     

     

     

    2023

     

    Individual Retirement

     

     

     

    Premiums

    $

    36

     

     

    $

    29

     

    Deposits

     

    5,493

     

     

     

    3,935

     

    Other(1)

     

    (3

    )

     

     

    (3

    )

    Premiums and deposits

     

    5,526

     

     

     

    3,961

     

    Group Retirement

     

     

     

    Premiums

     

    5

     

     

     

    6

     

    Deposits

     

    1,958

     

     

     

    1,825

     

    Premiums and deposits(2)(3)

     

    1,963

     

     

     

    1,831

     

    Life Insurance

     

     

     

    Premiums

     

    352

     

     

     

    449

     

    Deposits

     

    386

     

     

     

    393

     

    Other(1)

     

    118

     

     

     

    243

     

    Premiums and deposits

     

    856

     

     

     

    1,085

     

    Institutional Markets

     

     

     

    Premiums

     

    208

     

     

     

    200

     

    Deposits

     

    1,045

     

     

     

    2,048

     

    Other(1)

     

    10

     

     

     

    8

     

    Premiums and deposits

     

    1,263

     

     

     

    2,256

     

    Total

     

     

     

    Premiums

     

    601

     

     

     

    684

     

    Deposits

     

    8,882

     

     

     

    8,201

     

    Other(1)

     

    125

     

     

     

    248

     

    Premiums and deposits

    $

    9,608

     

     

    $

    9,133

     

    (1) Other principally consists of ceded premiums, in order to reflect gross premiums and deposits
    (2) Includes premiums and deposits related to in-plan mutual funds of $770 million and $773 million for the three months ended September 30, 2024 and September 30, 2023, respectively
    (3) Excludes client deposits into advisory and brokerage accounts of $761 million and $656 million for the three months ended September 30, 2024 and September 30, 2023, respectively

     

    Contacts

    Işıl Müderrisoğlu (Investors): investorrelations@corebridgefinancial.com
    Matt Ward (Media): media.contact@corebridgefinancial.com

    Originally Posted at Business Wire on November 4, 2024 by Corebridge Financial, Inc.

    Categories: Industry Articles
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