CRBG Corebridge Financial Inc

• Premiums and deposits1 grew 45% compared to the prior year quarter
• Base portfolio income2 for our insurance operating businesses grew 23% while base yield2 expanded 60 basis points compared to the prior year quarter
• Net loss of $459 million, or $0.70 per share, largely the result of realized losses recorded for the Fortitude Re funds withheld embedded derivative
• Adjusted after-tax operating income1 of $632 million and operating EPS1 of $0.97 per share reflect strong base spread income2
• Holding company liquidity of $1.8 billion as of March 31, 2023
• Continue to maintain Life Fleet RBC Ratio2 in excess of 400% target
• Declared quarterly cash dividend $0.23 per share of common stock on May 8, 2023
• Adopted long-duration targeted improvements, retroactive to January 1, 2021
• Board of Directors authorized $1 billion share repurchase program

Corebridge Financial, Inc. ("Corebridge" or the "Company") (NYSE: CRBG) today reported financial results for the first quarter ended March 31, 2023.

Kevin Hogan, President and Chief Executive Officer of Corebridge, said, "Corebridge has had a terrific start to the year, delivering another excellent quarter while advancing our key strategic initiatives. We remain disciplined in our capital allocation and continue to balance investments in long-term growth while maintaining a strong balance sheet with ample liquidity and capital.

"We generated strong sales with attractive margins across our businesses, and positive net flows in our general account. On a year-over-year basis, our premiums and deposits increased 45% and our core sources of income grew 15%, with base spread income up 38%. We are positioned for continued success, supported by a strong business model, broad distribution platform, diversified core earnings and a robust risk management approach.

"Last week, our Board of Directors approved a share repurchase program of up to $1 billion. This is an important milestone toward our commitment to provide an attractive return to shareholders."

CONSOLIDATED RESULTS

 

 

Three Months Ended March 31,

($ in millions, except per share data)

 

 

2023

 

 

 

2022

 

Net income (loss) attributable to common shareholders

 

$

(459

)

 

$

3,366

 

Income (loss) per common share attributable to common shareholders

 

$

(0.70

)

 

$

5.22

 

Adjusted after-tax operating income

 

$

632

 

 

$

743

 

Operating EPS

 

$

0.97

 

 

$

1.15

 

Book value per common share

 

$

17.83

 

 

$

31.05

 

Adjusted book value per common share1

 

$

35.88

 

 

$

34.59

 

Pre-tax income (loss)

 

$

(669

)

 

$

4,300

 

Adjusted pre-tax operating income1

 

$

724

 

 

$

909

 

Premiums and deposits

 

$

10,341

 

 

$

7,153

 

Net investment income

 

$

2,695

 

 

$

2,581

 

Net investment income (APTOI basis)1

 

$

2,335

 

 

$

2,311

 

Base portfolio income - insurance operating businesses

 

$

2,249

 

 

$

1,830

 

Variable investment income2 - insurance operating businesses

 

$

28

 

 

$

300

 

Corporate and other3

 

$

58

 

 

$

181

 

Return on average equity

 

 

(17.5

%)

 

 

57.0

%

Adjusted return on average equity1

 

 

10.8

%

 

 

13.5

%

Net loss was $459 million, a 114% decrease compared to the prior year quarter. The change largely was driven by realized losses recorded for the Fortitude Re funds withheld embedded derivative.

Adjusted pre-tax operating income ("APTOI") was $724 million, a 20% decrease compared to the prior year quarter. Variable investment income was the largest contributor to the year-over-year decline. Excluding variable investment income, APTOI was $696 million, a 14% increase compared to the prior year quarter, the result of higher base portfolio income, improved mortality experience and lower expenses, partially offset by lower fee income2 and higher interest expense on net debt raised during 2022.

Premiums and deposits were $10.3 billion, a 45% increase compared to 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% when compared to the prior year quarter. These results mainly reflect higher fixed and fixed index annuity deposits partially offset by lower variable annuity deposits in Individual Retirement and Group Retirement.

Net investment income was $2.7 billion, a 4% increase compared to the prior year quarter, while net investment income on an APTOI basis was $2.3 billion, a 1% increase compared to the prior year quarter. This improvement largely was due to higher base portfolio income, which grew $419 million, or 23%, compared to the prior year quarter. This was partially offset by lower variable investment income which declined $272 million, or 91%, over the same period.

BUSINESS RESULTS

Individual Retirement

 

Three Months Ended March 31,

($ in millions)

 

 

2023

 

 

2022

Premiums and deposits

 

$

4,883

 

$

3,881

Spread income

 

$

623

 

$

542

Base spread income

 

$

618

 

$

416

Variable investment income

 

$

5

 

$

126

Fee income

 

$

277

 

$

308

Adjusted pre-tax operating income

 

$

534

 

$

468

• Premiums and deposits increased $1.0 billion, or 26%, as compared to the prior year quarter largely driven by growth of fixed and fixed index annuity deposits, partially offset by lower variable annuity deposits. General account net flows decreased 2% compared to the first quarter of 2022 but increased 71% on a sequential quarter basis due to higher premiums and deposits, partially offset by elevated surrenders
• Base net investment spread1 of 2.31% for the quarter expanded 71 basis points and 17 basis points on a prior year and sequential quarter basis, respectively
• APTOI increased $66 million, or 14%, year-over-year primarily due to higher base spread income and lower expenses, partially offset by lower variable investment income and lower fee income

Group Retirement

 

Three Months Ended March 31,

($ in millions)

 

 

2023

 

 

2022

Premiums and deposits

 

$

2,246

 

$

1,888

Spread income

 

$

213

 

$

247

Base spread income

 

$

204

 

$

170

Variable investment income

 

$

9

 

$

77

Fee income

 

$

176

 

$

199

Adjusted pre-tax operating income

 

$

186

 

$

242

• Premiums and deposits increased $358 million, or 19%, as compared to the prior year quarter due to higher plan acquisitions and out-of-plan fixed annuity deposits, partially offset by lower out-of-plan variable annuity deposits. Net flows were flat compared to the first quarter of 2022 but increased 14% on a sequential quarter basis due to lower surrenders and withdrawals
• Base net investment spread of 1.52% for the quarter expanded 24 basis points on a prior year quarter basis but declined 7 basis points on a sequential quarter basis
• APTOI decreased $56 million, or 23%, year-over-year primarily due to lower variable investment income and lower fee income, partially offset by higher base spread income

Life Insurance

 

Three Months Ended March 31,

($ in millions)

 

 

2023

 

 

2022

Premiums and deposits

 

$

1,049

 

$

1,057

Underwriting margin2

 

$

356

 

$

372

Underwriting margin excluding variable investment income

 

$

356

 

$

321

Variable investment income

 

$

—

 

$

51

Adjusted pre-tax operating income

 

$

82

 

$

84

• APTOI was relatively unchanged due to improved mortality experience and higher base portfolio income partially offset by lower variable investment income

Institutional Markets

 

Three Months Ended March 31,

($ in millions)

 

 

2023

 

 

2022

Premiums and deposits

 

$

2,163

 

$

327

Spread income

 

$

82

 

$

101

Base spread income

 

$

68

 

$

61

Variable investment income

 

$

14

 

$

40

Fee income

 

$

16

 

$

15

Underwriting margin

 

$

17

 

$

22

Underwriting margin excluding variable investment income

 

$

17

 

$

18

Variable investment income

 

$

—

 

$

4

Adjusted pre-tax operating income

 

$

85

 

$

115

• Premiums and deposits increased $1.8 billion, or 561%, as compared to the prior year quarter driven by higher volume of pension risk transfer, guaranteed investment contracts and structured settlement annuities. Pension risk transfer sales were $1.5 billion for the first quarter of 2023 compared to $215 million for the first quarter of 2022
• APTOI decreased $30 million, or 26%, year-over-year primarily due to lower variable investment income

Corporate and Other3

 

Three Months Ended March 31,

($ in millions)

 

 

2023

 

 

 

2022

 

Corporate expenses

 

$

(48

)

 

$

(32

)

Interest on financial debt

 

$

(108

)

 

$

(38

)

Asset management

 

$

—

 

 

$

3

 

Consolidated investment entities

 

$

—

 

 

$

21

 

Other

 

$

(7

)

 

$

46

 

Adjusted pre-tax operating income (loss)

 

$

(163

)

 

$

—

 

• APTOI decreased $163 million year-over-year primarily due to higher interest expense on financial debt driven by the Company’s recapitalization in connection with the IPO, as well as a non-recurring item included in "Other" which favorably impacted results in the prior year quarter

CAPITAL AND LIQUIDITY HIGHLIGHTS

• Holding company liquidity of $1.8 billion as of March 31, 2023
• Financial leverage ratio of 27.9%
• Life Fleet RBC Ratio estimated to remain above our 400% target, and exceed our reported year-end RBC ratio
• Adjusted book value1 declined $180 million, or 1%, sequentially reflective of strong earnings while also paying $149 million in dividends ($445 million since the IPO)
• Declared quarterly dividend of $0.23 per share of common stock on May 8, 2023, payable on June 30, 2023, to shareholders of record at the close of business on June 16, 2023
• Board of Directors authorized share repurchase program of up to $1 billion on May 4, 2023

________________________________

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 closest 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

Includes consolidations and eliminations

CONFERENCE CALL

Corebridge will host a conference call on Tuesday, May 9, 2023, at 8:30 a.m. EDT 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 www.corebridgefinancial.com.

About Corebridge Financial

Corebridge Financial, Inc. makes it possible for more people to take action in their financial lives. With more than $365 billion in assets under management and administration as of March 31, 2023, 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 LinkedIn, YouTube, Facebook and Twitter. 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

This release contains forward-looking statements. Words such as “expects,” “believes,” “anticipates,” “intends,” “seeks,” “aims,” “plans,” “assumes,” “estimates,” “projects,” “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 and its consolidated subsidiaries. There can be no assurance that future developments affecting Corebridge and its consolidated subsidiaries 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 in such forward-looking statements, including, among others, risks related to:

• market conditions, including risks related to rapidly increasing interest rates, declining or negative interest rates, deterioration of market conditions, geopolitical tensions, equity market declines or volatility and the COVID-19 pandemic;
• insurance risk and related exposures, including risks related to insurance liability claims exceeding reserves and reinsurance becoming unavailable;
• 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 access to funds from our subsidiaries being restricted, the possible incurrence of additional debt, the ability to refinance existing debt, the illiquidity of some of our investments, a downgrade in our insurer financial strength ratings and non-performance by counterparties;
• our business and operations, including risks related to pricing for our products, guarantees within certain of our products, our use of derivatives instruments, marketing and distribution of our products through third parties, our reliance on third parties to provide business and administrative services, maintaining the availability of our critical technology systems, our risk management policies becoming ineffective, significant legal or regulatory proceedings, our business strategy becoming ineffective, intense competition, catastrophes, changes in our accounting principles and financial reporting requirements, our foreign operations, business or asset acquisitions and dispositions and our ability to protect our intellectual property;
• the intense regulation of our business;
• 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;
• competition and employees, including risks related to our ability to attract and retain key employees and employee error and misconduct;
• our investment managers, including our reliance on agreements with Blackstone ISG-1 Advisors L.L.C. which we have a limited ability to terminate or amend and increased regulation or scrutiny of investment advisers and investment activities;
• our separation from AIG, including risks related to the replacement or replication of functions and the loss of benefits from AIG’s global contracts, our inability to file a single US consolidated income federal income tax return for a five-year period, and limitations on our ability to use deferred tax assets to offset future taxable income;
• our agreements with Fortitude Reinsurance Company Ltd.; and
• other factors discussed in “Management’s Discussion and Analysis of Financial Conditions and Results of Operations” and “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2022, filed with the U.S. Securities and Exchange Commission pursuant to Rule 424(b)(4) under the Securities Act of 1933, as amended.

Forward-looking statements should be read in conjunction with the other cautionary statements, risks, uncertainties and other factors identified in our filings with the Securities and Exchange Commission. Further, 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.

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 Securities and Exchange Commission 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 RELATED ADJUSTMENTS:

The 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)”, including changes in the allowance for credit losses on available-for-sale securities and loans, as well as gains or losses from sales of securities, 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, and insurance liabilities that are accounted for as embedded derivatives 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:

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 instrument-specific 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:

• 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 items that can fluctuate significantly from period to period, including changes in fair value of our available-for-sale securities portfolio, changes in the fair value of MRBs attributable to changes in the instrument-specific risk, changes in the discount rates used to measure traditional and limited payment long-duration insurance contracts and foreign currency translation adjustments. This measure also 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. 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 because it eliminates items that can fluctuate significantly from period to period, including changes in fair value of our available-for-sale securities portfolio, changes in the fair value of market risk benefits attributable to changes in the instrument-specific risk, changes in the discount rates used to measure traditional and limited payment long-duration insurance contracts and foreign currency translation adjustments. This measure also 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. In addition, we adjust for the cumulative unrealized gains and losses related to Fortitude Re 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.

Normalized distributions are defined as dividends paid by the Life Fleet subsidiaries as well as the international insurance subsidiaries, less non-recurring dividends, plus dividend capacity that would have been available to Corebridge absent strategies that resulted in utilization of tax attributes. We believe that presenting normalized distributions is useful in understanding a significant component of our liquidity as a stand-alone company.

Operating EPS is calculated 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, group benefit 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 SVW contracts.
• Assets Under Management and Administration (“AUMA”) is the cumulative amount of AUM and AUA.

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, affordable housing 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.

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

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

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

Cost of funds means the interest credited to policyholders excluding the amortization deferred of 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 utilize 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 utilize 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 utilize 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.

Life Fleet RBC Ratio

• Life Fleet includes our three primary risk-bearing entities, 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”). AGL, USL and VALIC are domestic insurance entities with a statutory surplus greater than $500 million on an individual basis. The Life Fleet does not include AGC Life Insurance Company, as it has no operations outside of internal reinsurance.
• Life Fleet RBC Ratio is the risk-based capital (“RBC”) ratio for the Life Fleet. RBC ratios are quoted using the Company Action Level.

Financial Leverage Ratio is the ratio of total financial debt to the sum of financial debt plus adjusted book value and redeemable non-controlling interests.

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 March 31,

2023

2022

(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/net income, including noncontrolling interests

$

(669

)

$

(216

)

$

—

 

$

(453

)

$

4,300

 

$

859

 

$

—

 

$

3,441

 

Noncontrolling interests

 

—

 

 

—

 

 

(6

)

 

(6

)

 

—

 

 

—

 

 

(75

)

 

(75

)

Pre-tax income/net income attributable to Corebridge

 

(669

)

 

(216

)

 

(6

)

 

(459

)

 

4,300

 

 

859

 

 

(75

)

 

3,366

 

Fortitude Re related items

 

 

 

 

 

 

 

 

Net investment income on Fortitude Re funds withheld assets

 

(394

)

 

(87

)

 

—

 

 

(307

)

 

(278

)

 

(58

)

 

—

 

 

(220

)

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

 

(20

)

 

(4

)

 

—

 

 

(16

)

 

123

 

 

26

 

 

—

 

 

97

 

Net realized losses on Fortitude Re funds withheld embedded derivative

 

1,025

 

 

227

 

 

—

 

 

798

 

 

(2,837

)

 

(610

)

 

—

 

 

(2,227

)

Subtotal Fortitude Re related items

 

611

 

 

136

 

 

—

 

 

475

 

 

(2,992

)

 

(642

)

 

—

 

 

(2,350

)

Other reconciling Items:

 

 

 

 

 

 

 

 

Changes in uncertain tax positions and other tax adjustments

 

—

 

 

21

 

 

—

 

 

(21

)

 

—

 

 

42

 

 

—

 

 

(42

)

Deferred income tax valuation allowance (releases) charges

 

—

 

 

(16

)

 

—

 

 

16

 

 

—

 

 

(24

)

 

—

 

 

24

 

Change in fair value of market risk benefits, net

 

196

 

 

41

 

 

—

 

 

155

 

 

(233

)

 

(50

)

 

—

 

 

(183

)

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

 

3

 

 

1

 

 

—

 

 

2

 

 

(13

)

 

(3

)

 

—

 

 

(10

)

Changes in benefit reserves related to net realized (gains) losses

 

(5

)

 

(1

)

 

—

 

 

(4

)

 

(2

)

 

—

 

 

—

 

 

(2

)

Net realized (gains) losses(a)

 

508

 

 

107

 

 

—

 

 

401

 

 

(120

)

 

(25

)

 

—

 

 

(95

)

Non-operating litigation reserves and settlements

 

—

 

 

—

 

 

—

 

 

—

 

 

(20

)

 

(4

)

 

—

 

 

(16

)

Separation costs

 

52

 

 

11

 

 

—

 

 

41

 

 

44

 

 

9

 

 

—

 

 

35

 

Restructuring and other costs

 

27

 

 

6

 

 

—

 

 

21

 

 

14

 

 

3

 

 

—

 

 

11

 

Non-recurring costs related to regulatory or accounting changes

 

4

 

 

1

 

 

—

 

 

3

 

 

3

 

 

1

 

 

—

 

 

2

 

Net (gain) loss on divestiture

 

3

 

 

1

 

 

—

 

 

2

 

 

2

 

 

—

 

 

—

 

 

2

 

Pension expense - non operating

 

—

 

 

—

 

 

—

 

 

—

 

 

1

 

 

—

 

 

—

 

 

1

 

Noncontrolling interests

 

(6

)

 

—

 

 

6

 

 

—

 

 

(75

)

 

—

 

 

75

 

 

—

 

Subtotal: Non-Fortitude Re reconciling items

 

782

 

 

172

 

 

6

 

 

616

 

 

(399

)

 

(51

)

 

75

 

 

(273

)

Total adjustments

 

1,393

 

 

308

 

 

6

 

 

1,091

 

 

(3,391

)

 

(693

)

 

75

 

 

(2,623

)

Adjusted pre-tax operating income(loss)/Adjusted after-tax operating income (loss) attributable to Corebridge common shareholders

$

724

 

$

92

 

$

—

 

$

632

 

$

909

 

$

166

 

$

—

 

$

743

 

(a)

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 March 31, 2023

 

 

 

 

 

 

 

Premiums

$

78

$

6

$

425

$

1,575

$

20

 

$

—

 

$

2,104

 

Policy fees

 

174

 

100

 

375

 

49

 

—

 

 

—

 

 

698

 

Net investment income

 

1,128

 

500

 

317

 

332

 

68

 

 

(10

)

 

2,335

 

Net realized gains (losses)(a)

 

—

 

—

 

—

 

—

 

4

 

 

—

 

 

4

 

Advisory fee and other income

 

103

 

76

 

29

 

—

 

14

 

 

—

 

 

222

 

Total adjusted revenues

 

1,483

 

682

 

1,146

 

1,956

 

106

 

 

(10

)

 

5,363

 

Policyholder benefits

 

65

 

9

 

708

 

1,718

 

—

 

 

—

 

 

2,500

 

Interest credited to policyholder account balance

 

519

 

291

 

82

 

123

 

—

 

 

—

 

 

1,015

 

Amortization of deferred policy acquisition costs

 

137

 

21

 

96

 

2

 

—

 

 

—

 

 

256

 

Non-deferrable insurance commissions

 

86

 

28

 

17

 

5

 

—

 

 

—

 

 

136

 

Advisory fee expenses

 

34

 

29

 

2

 

—

 

—

 

 

—

 

 

65

 

General operating expenses

 

108

 

118

 

159

 

23

 

91

 

 

—

 

 

499

 

Interest expense

 

—

 

—

 

—

 

—

 

172

 

 

(10

)

 

162

 

Total benefits and expenses

 

949

 

496

 

1,064

 

1,871

 

263

 

 

(10

)

 

4,633

 

Noncontrolling interest

 

—

 

—

 

—

 

—

 

(6

)

 

—

 

 

(6

)

Adjusted pre-tax operating income

$

534

$

186

$

82

$

85

$

(163

)

$

—

 

$

724

 

(in millions)

Individual Retirement

Group Retirement

Life Insurance

Institutional Markets

Corporate & Other

Eliminations

Total Corebridge

Three Months Ended March 31, 2022

 

 

 

 

 

 

 

Premiums

$

56

$

8

$

425

$

238

$

21

 

$

—

 

$

748

 

Policy fees

 

185

 

114

 

384

 

47

 

—

 

 

—

 

 

730

 

Net investment income

 

983

 

527

 

356

 

264

 

186

 

 

(5

)

 

2,311

 

Net realized gains (losses)(a)

 

—

 

—

 

—

 

—

 

11

 

 

—

 

 

11

 

Advisory fee and other income

 

123

 

85

 

36

 

1

 

38

 

 

5

 

 

288

 

Total adjusted revenues

 

1,347

 

734

 

1,201

 

550

 

256

 

 

—

 

 

4,088

 

Policyholder benefits

 

66

 

10

 

744

 

350

 

—

 

 

—

 

 

1,170

 

Interest credited to policyholder account balance

 

454

 

284

 

85

 

59

 

—

 

 

—

 

 

882

 

Amortization of deferred policy acquisition costs

 

119

 

19

 

104

 

1

 

—

 

 

—

 

 

243

 

Non-deferrable insurance commissions

 

92

 

28

 

18

 

6

 

—

 

 

—

 

 

144

 

Advisory fee expenses

 

37

 

34

 

—

 

—

 

—

 

 

—

 

 

71

 

General operating expenses

 

111

 

117

 

166

 

19

 

104

 

 

7

 

 

524

 

Interest expense

 

—

 

—

 

—

 

—

 

77

 

 

(7

)

 

70

 

Total benefits and expenses

 

879

 

492

 

1,117

 

435

 

181

 

 

—

 

 

3,104

 

Noncontrolling interest

 

—

 

—

 

—

 

—

 

(75

)

 

—

 

 

(75

)

Adjusted pre-tax operating income

$

468

$

242

$

84

$

115

$

—

 

$

—

 

$

909

 

(a)

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 March 31,

(in millions)

 

2023

 

 

2022

Individual Retirement

 

 

 

Spread income

$

623

 

$

542

Fee income

 

277

 

 

308

Total Individual Retirement

 

900

 

 

850

Group Retirement

 

 

 

Spread income

 

213

 

 

247

Fee income

 

176

 

 

199

Total Group Retirement

 

389

 

 

446

Life Insurance

 

 

 

Underwriting margin

 

356

 

 

372

Total Life Insurance

 

356

 

 

372

Institutional Markets

 

 

 

Spread income

 

82

 

 

101

Fee income

 

16

 

 

15

Underwriting margin

 

17

 

 

22

Total Institutional Markets

 

115

 

 

138

Total

 

 

 

Spread income

 

918

 

 

890

Fee income

 

469

 

 

522

Underwriting margin

 

373

 

 

394

Total

$

1,760

 

$

1,806

The following table presents Life Insurance underwriting margin:

 

Three Months Ended March 31,

(in millions)

 

2023

 

 

 

2022

 

Premiums

$

425

 

 

$

425

 

Policy fees

 

375

 

 

 

384

 

Net investment income

 

317

 

 

 

356

 

Other income

 

29

 

 

 

36

 

Policyholder benefits

 

(708

)

 

 

(744

)

Interest credited to policyholder account balances

 

(82

)

 

 

(85

)

Underwriting margin

$

356

 

 

$

372

 

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

 

Three Months Ended March 31,

(in millions)

 

2023

 

 

 

2022

 

Premiums

$

1,583

 

 

$

247

 

Net investment income

 

298

 

 

 

224

 

Policyholder benefits

 

(1,702

)

 

 

(337

)

Interest credited to policyholder account balances

 

(97

)

 

 

(33

)

Spread income(a)

$

82

 

 

$

101

 

SVW fees

 

16

 

 

 

15

 

Fee income

$

16

 

 

$

15

 

Premiums

 

(8

)

 

 

(9

)

Policy fees (excluding SVW)

 

33

 

 

 

32

 

Net investment income

 

34

 

 

 

37

 

Other income

 

—

 

 

 

1

 

Policyholder benefits

 

(16

)

 

 

(13

)

Interest credited to policyholder account balances

 

(26

)

 

 

(26

)

Underwriting margin(b)

$

17

 

 

$

22

 

(a)

Represents spread income from Pension Risk Transfer, Guaranteed Investment Contracts and Structured Settlement products

(b)

Represents underwriting margin from Corporate Markets products, including COLI-BOLI, private placement variable universal life insurance and private placement variable annuity products

The following table presents Operating EPS:

 

Three Months Ended March 31,

(in millions, except per common share data)

 

2023

 

 

 

2022

GAAP Basis

 

 

 

Numerator for EPS

 

 

 

Net income (loss)

$

(453

)

 

$

3,441

Less: Net income (loss) attributable to noncontrolling interests

 

6

 

 

 

75

Net income (loss) attributable to Corebridge common shareholders

$

(459

)

 

$

3,366

 

 

 

 

Denominator for EPS (a)

 

 

 

Weighted average common shares outstanding - basic

 

650.8

 

 

645.0

Dilutive common shares(b)

 

—

 

 

 

—

Weighted average common shares outstanding - diluted

 

650.8

 

 

645.0

 

 

 

 

Income per common share attributable to Corebridge common shareholders(a)

 

 

 

Common stock - basic

$

(0.70

)

 

$

5.22

Common stock - diluted

$

(0.70

)

 

$

5.22

 

 

 

 

Operating Basis(a)

 

 

 

Adjusted after-tax operating income attributable to Corebridge shareholders

$

632

 

 

$

743

Weighted average common shares outstanding - diluted

 

652.8

 

 

 

645.0

Operating earnings per common share

$

0.97

 

 

$

1.15

(a)

The results of the September 6, 2022 stock split have been applied retroactively for all periods prior to September 6, 2022

(b)

Potential dilutive common shares include our share-based employee compensation plans

The following table presents a reconciliation of dividends to normalized distributions:

 

 

Three Months Ended March 31,

(in millions)

 

 

2023

 

 

2022

Subsidiary dividends paid

 

$

500

 

$

700

Less: Non-recurring dividends

 

 

—

 

 

—

Tax sharing payments related to utilization of tax attributes

 

 

—

 

 

147

Normalized distributions

 

$

500

 

$

847

The following table presents the reconciliation of Adjusted Book Value:

At Period End

March 31, 2023

 

December 31, 2022

 

March 31, 2022

(in millions, except per share data)

 

 

 

 

 

Total Corebridge shareholders' equity (a)

$

11,555

 

 

$

9,380

 

 

$

20,028

 

Less: Accumulated other comprehensive income (AOCI)

 

(14,067

)

 

 

(16,863

)

 

 

(2,026

)

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

 

(2,365

)

 

 

(2,806

)

 

 

255

 

Total adjusted book value (b)

 

23,257

 

 

 

23,437

 

 

 

22,309

 

Total common shares outstanding (c)

 

648.1

 

 

 

645.0

 

 

 

645.0

 

Book value per common share (a/c)

$

17.83

 

 

$

14.54

 

 

$

31.05

 

Adjusted book value per common share (b/c)

$

35.88

 

 

$

36.34

 

 

$

34.59

 

The following table presents the reconciliation of Adjusted ROAE:

 

Three Months Ended March 31,

(in millions, unless otherwise noted)

 

2023

 

 

 

2022

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

$

(1,836

)

 

$

13,464

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

 

2,528

 

 

 

2,972

Average Corebridge shareholders’ equity (c)

 

10,468

 

 

 

23,629

Less: Average AOCI

 

(15,465

)

 

 

3,104

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

 

(2,586

)

 

 

1,442

Average Adjusted Book Value (d)

$

23,347

 

 

$

21,967

Return on Average Equity (a/c)

(17.5

) %

57.0

%

Adjusted ROAE (b/d)

10.8

%

13.5

%

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

 

Three Months Ended March 31,

(in millions)

 

2023

 

 

 

2022

 

Net investment income (net income basis)

$

2,695

 

 

$

2,581

 

Net investment (income) on Fortitude Re funds withheld assets

 

(394

)

 

 

(278

)

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

 

(13

)

 

 

(14

)

Other adjustments

 

(10

)

 

 

(12

)

Derivative income recorded in net realized investment gains (losses)

 

57

 

 

 

34

 

Total adjustments

 

(360

)

 

 

(270

)

Net investment income (APTOI basis)(a)

$

2,335

 

 

$

2,311

 

(a)

Includes net investment income (loss) from Corporate and Other of $58 million and $181 million for the three months ended March 31, 2023 and 2022, respectively

The following table presents the premiums and deposits:

 

Three Months Ended March 31,

(in millions)

 

2023

 

 

 

2022

 

Individual Retirement

 

 

 

Premiums

$

78

 

 

$

56

 

Deposits

 

4,807

 

 

 

3,830

 

Other(a)

 

(2

)

 

 

(5

)

Premiums and deposits

 

4,883

 

 

 

3,881

 

Group Retirement

 

 

 

Premiums

 

6

 

 

 

8

 

Deposits

 

2,240

 

 

 

1,880

 

Premiums and deposits(b)(c)

 

2,246

 

 

 

1,888

 

Life Insurance

 

 

 

Premiums

 

425

 

 

 

425

 

Deposits

 

398

 

 

 

397

 

Other(a)

 

226

 

 

 

235

 

Premiums and deposits

 

1,049

 

 

 

1,057

 

Institutional Markets

 

 

 

Premiums

 

1,575

 

 

 

238

 

Deposits

 

581

 

 

 

82

 

Other(a)

 

7

 

 

 

7

 

Premiums and deposits

 

2,163

 

 

 

327

 

Total

 

 

 

Premiums

 

2,084

 

 

 

727

 

Deposits

 

8,026

 

 

 

6,189

 

Other(a)

 

231

 

 

 

237

 

Premiums and deposits

$

10,341

 

 

$

7,153

 

(a)

Other principally consists of ceded premiums, in order to reflect gross premiums and deposits

(b)

Includes premiums and deposits related to in-plan mutual funds of $1,011 million and $868 million for the three months ended March 31, 2023 and 2022, respectively

(c)

Excludes client deposits into advisory and brokerage accounts of $542 million and $602 million for the three months ended March 31, 2023 and 2022, respectively

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20230508005753/en/

Josh Smith (Investors): investorrelations@corebridgefinancial.com Dana Ripley (Media): dana.ripley@aig.com