CRBG Corebridge Financial Inc

• Premiums and deposits1 grew 42% compared to the prior year quarter
• Base spread income2 grew 42% while base yield2 expanded 76 basis points compared to the prior year quarter
• Net income of $771 million, or $1.18 per share, largely reflects strong base portfolio income as well as favorable mark to market movements on embedded derivatives and market risk benefits
• Adjusted after-tax operating income1 of $679 million and operating EPS1 of $1.04 per share reflect strong base spread income
• Life Fleet RBC Ratio2 remains in excess of 400% target
• Returned $750 million to shareholders during the quarter in the form of dividends and share repurchases
• Declared quarterly cash dividend $0.23 per share of common stock on August 3, 2023
• Announced sale of Laya Healthcare to AXA for €650 million

Corebridge Financial, Inc. ("Corebridge" or the "Company") (NYSE: CRBG) today reported financial results for the second quarter ended June 30, 2023.

Kevin Hogan, President and Chief Executive Officer of Corebridge, said, “This was an excellent quarter for Corebridge, where we continued to benefit from our focused execution, disciplined risk management and the competitive strengths of our diversified businesses. We generated nearly $10 billion of premiums and deposits, a 42% increase over the prior year. Base spread income also grew 42% year over year, and our businesses remain well positioned to capitalize on current market opportunities.

“Corebridge returned $750 million to shareholders this quarter, through a combination of dividends and share repurchases. We are pleased to have begun our share repurchase program only nine months after our initial public offering, marking an important milestone in our commitment to provide an attractive capital return to shareholders. Also, we believe the sale of Laya Healthcare unlocks significant value for shareholders and represents an important step in maintaining our focus on the life and retirement businesses in the United States.

“Our financial position is strong, and our results reflect the earnings power of our franchise and the positive momentum across our businesses. Going into the second half of the year, we remain focused on executing our strategies and optimizing our capital to generate long-term growth in shareholder value.”

CONSOLIDATED RESULTS

 

 

Three Months Ended June 30,

($ in millions, except per share data)

 

2023

 

2022

Net income (loss) attributable to common shareholders

 

$

771

 

 

$

2,594

 

Income (loss) per common share attributable to common shareholders

 

$

1.18

 

 

$

4.02

 

Adjusted after-tax operating income

 

$

679

 

 

$

491

 

Operating EPS

 

$

1.04

 

 

$

0.76

 

Book value per common share

 

$

16.61

 

 

$

18.99

 

Adjusted book value per common share1

 

$

36.44

 

 

$

35.09

 

Pre-tax income (loss)

 

$

911

 

 

$

3,326

 

Adjusted pre-tax operating income1

 

$

836

 

 

$

611

 

Premiums and deposits

 

$

9,941

 

 

$

6,991

 

Net investment income

 

$

2,714

 

 

$

2,280

 

Net investment income (APTOI basis)1

 

$

2,480

 

 

$

2,109

 

Base portfolio income - insurance operating businesses

 

$

2,366

 

 

$

1,858

 

Variable investment income2 - insurance operating businesses

 

$

96

 

 

$

120

 

Corporate and other3

 

$

18

 

 

$

131

 

Return on average equity

 

 

27.9

%

 

 

64.3

%

Adjusted return on average equity1

 

 

11.7

%

 

 

8.7

%

Net income was $771 million, a 70% decrease compared to the prior year quarter. The change largely was driven by lower realized gains recorded for the Fortitude Re funds withheld embedded derivative, partially offset by higher net investment income and changes in the fair value of market risk benefits.

Adjusted pre-tax operating income ("APTOI") was $836 million, a 37% increase compared to the prior year quarter. Base portfolio income was the largest contributor to the year-over-year improvement. Excluding variable investment income, APTOI was $740 million, a 51% increase compared to the prior year quarter, the result of higher base portfolio income, partially offset by lower fee income2 and higher interest expense on financial debt raised during 2022.

Premiums and deposits were $9.9 billion, a 42% 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 10% when compared to the prior year quarter. These results mainly reflect higher fixed index annuity and fixed annuity deposits partially offset by lower variable annuity deposits in Individual Retirement and Group Retirement.

Net investment income was $2.7 billion, a 19% increase compared to the prior year quarter, while net investment income on an APTOI basis was $2.5 billion, an 18% increase compared to the prior year quarter. This improvement largely was due to higher base portfolio income, which grew $508 million, or 27%, compared to the prior year quarter. This was partially offset by lower variable investment income which declined $24 million, or 20%, over the same period.

BUSINESS RESULTS

Individual Retirement

 

Three Months Ended June 30,

($ in millions)

 

2023

 

2022

Premiums and deposits

 

$

4,045

 

$

3,620

Spread income

 

$

684

 

$

448

Base spread income

 

$

654

 

$

420

Variable investment income

 

$

30

 

$

28

Fee income

 

$

280

 

$

301

Adjusted pre-tax operating income

 

$

574

 

$

365

• Premiums and deposits increased $0.4 billion, or 12%, as compared to the prior year quarter largely driven by growth of fixed index annuity deposits, partially offset by lower fixed annuity and variable annuity deposits. General account net flows for the second quarter of 2023 remained positive at $0.4 billion
• Base net investment spread1 of 2.41% for the second quarter of 2023 expanded 81 basis points and 10 basis points on a prior year and sequential quarter basis, respectively
• APTOI increased $209 million, or 57%, year over year primarily due to higher base spread income, partially offset by lower fee income

Group Retirement

 

Three Months Ended June 30,

($ in millions)

 

2023

 

2022

Premiums and deposits

 

$

1,923

 

$

1,772

Spread income

 

$

213

 

$

205

Base spread income

 

$

193

 

$

171

Variable investment income

 

$

20

 

$

34

Fee income

 

$

178

 

$

177

Adjusted pre-tax operating income

 

$

197

 

$

179

• Premiums and deposits increased $151 million, or 9%, as compared to the prior year quarter due to higher out-of-plan fixed annuity deposits, partially offset by lower out-of-plan variable annuity deposits and plan acquisitions
• Base net investment spread of 1.55% for the second quarter of 2023 expanded 23 basis points and 3 basis points on a prior year quarter and sequential quarter basis, respectively
• APTOI increased $18 million, or 10%, year over year primarily due to higher base spread income and lower expenses, partially offset by lower variable investment income

Life Insurance

 

Three Months Ended June 30,

($ in millions)

 

2023

 

2022

Premiums and deposits

 

$

1,063

 

$

1,049

Underwriting margin2

 

$

361

 

$

389

Underwriting margin excluding variable investment income

 

$

355

 

$

340

Variable investment income

 

$

6

 

$

49

Adjusted pre-tax operating income

 

$

76

 

$

97

• APTOI decreased $21 million, or 22%, due to lower variable investment income partially offset by higher base portfolio income. Mortality experience was marginally favorable year over year

Institutional Markets

 

Three Months Ended June 30,

($ in millions)

 

2023

 

2022

Premiums and deposits

 

$

2,910

 

$

550

Spread income

 

$

117

 

$

67

Base spread income

 

$

77

 

$

61

Variable investment income

 

$

40

 

$

6

Fee income

 

$

16

 

$

16

Underwriting margin

 

$

20

 

$

19

Underwriting margin excluding variable investment income

 

$

20

 

$

16

Variable investment income

 

$

—

 

$

3

Adjusted pre-tax operating income

 

$

126

 

$

76

• Premiums and deposits increased $2.4 billion, or 429%, as compared to the prior year quarter driven by higher volume of pension risk transfer and guaranteed investment contracts. Pension risk transfer sales were $1.9 billion for the second quarter of 2023 compared to $450 million for the second quarter of 2022. Guaranteed investment contract issuances were $917 million for the second quarter of 2023
• APTOI increased $50 million, or 66%, year over year primarily due to higher base spread income and variable investment income

Corporate and Other3

 

Three Months Ended June 30,

($ in millions)

 

2023

 

2022

Corporate expenses

 

$

(47

)

 

$

(33

)

Interest on financial debt

 

$

(106

)

 

$

(73

)

Asset management

 

$

11

 

 

$

8

 

Consolidated investment entities

 

$

5

 

 

$

(13

)

Other

 

$

—

 

 

$

5

 

Adjusted pre-tax operating income (loss)

 

$

(137

)

 

$

(106

)

• APTOI decreased $31 million year over year primarily due to higher interest expense on financial debt driven by the Company’s recapitalization in connection with the IPO

CAPITAL AND LIQUIDITY HIGHLIGHTS

• Holding company liquidity of $1.6 billion as of June 30, 2023
• Financial leverage ratio of 28.0%
• Life Fleet RBC Ratio estimated to remain above our 400% target
• Adjusted book value per share1 of $36.44 grew on a sequential quarter basis due to strong earnings while also returning $750 million to shareholders
• Paid special dividend of $0.62 per share of common stock in addition to regular quarterly cash dividend of $0.23 per share of common stock
• Repurchased $200 million of shares from AIG and Blackstone
• Declared quarterly dividend of $0.23 per share of common stock on August 3, 2023, payable on September 29, 2023, to shareholders of record at the close of business on September 15, 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 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

 

Includes consolidations and eliminations

CONFERENCE CALL

Corebridge will host a conference call on Friday, August 4, 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 corebridgefinancial.com.

About Corebridge Financial

Corebridge Financial, Inc. makes it possible for more people to take action in their financial lives. With more than $370 billion in assets under management and administration as of June 30, 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 and Facebook. 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,” “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 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, stress and instability in the banking sector, geopolitical tensions, including the continued armed conflict between Ukraine and Russia;
• 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 and adequately perform 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, the historical performance of our investment managers not being indicative of future results of our investment portfolio, 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 Registration Statement on Form S-1 filed on June 5, 2023 with the U.S. Securities and Exchange Commission.

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 or are 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:

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:

• 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 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 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 inducement assets.

Base net investment spread means base yield less cost of funds, 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.

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 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.

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 June 30,

 

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

 

$

911

 

 

$

160

 

 

$

—

 

 

$

751

 

 

$

3,326

 

 

$

652

 

 

$

—

 

 

$

2,674

 

Noncontrolling interests

 

 

—

 

 

 

—

 

 

 

20

 

 

 

20

 

 

 

—

 

 

 

—

 

 

 

(80

)

 

 

(80

)

Pre-tax income/net income attributable to Corebridge

 

 

911

 

 

 

160

 

 

 

20

 

 

 

771

 

 

 

3,326

 

 

 

652

 

 

 

(80

)

 

 

2,594

 

Fortitude Re related items

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net investment income on Fortitude Re funds withheld assets

 

 

(270

)

 

 

(61

)

 

 

—

 

 

 

(209

)

 

 

(182

)

 

 

(39

)

 

 

—

 

 

 

(143

)

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

 

 

130

 

 

 

28

 

 

 

—

 

 

 

102

 

 

 

60

 

 

 

12

 

 

 

—

 

 

 

48

 

Net realized losses on Fortitude Re funds withheld embedded derivative

 

 

(122

)

 

 

(27

)

 

 

—

 

 

 

(95

)

 

 

(2,394

)

 

 

(515

)

 

 

—

 

 

 

(1,879

)

Subtotal Fortitude Re related items

 

 

(262

)

 

 

(60

)

 

 

—

 

 

 

(202

)

 

 

(2,516

)

 

 

(542

)

 

 

—

 

 

 

(1,974

)

Other reconciling Items:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Changes in uncertain tax positions and other tax adjustments

 

 

—

 

 

 

59

 

 

 

—

 

 

 

(59

)

 

 

—

 

 

 

34

 

 

 

—

 

 

 

(34

)

Deferred income tax valuation allowance (releases) charges

 

 

—

 

 

 

(35

)

 

 

—

 

 

 

35

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Change in fair value of market risk benefits, net

 

 

(262

)

 

 

(55

)

 

 

—

 

 

 

(207

)

 

 

(45

)

 

 

(8

)

 

 

—

 

 

 

(37

)

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

 

 

4

 

 

 

—

 

 

 

—

 

 

 

4

 

 

 

(10

)

 

 

(2

)

 

 

—

 

 

 

(8

)

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

 

 

1

 

 

 

—

 

 

 

—

 

 

 

1

 

 

 

(7

)

 

 

(2

)

 

 

—

 

 

 

(5

)

Net realized (gains) losses(a)

 

 

363

 

 

 

76

 

 

 

—

 

 

 

287

 

 

 

(146

)

 

 

(31

)

 

 

—

 

 

 

(115

)

Non-operating litigation reserves and settlements

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(2

)

 

 

(1

)

 

 

—

 

 

 

(1

)

Separation costs

 

 

70

 

 

 

15

 

 

 

—

 

 

 

55

 

 

 

37

 

 

 

8

 

 

 

—

 

 

 

29

 

Restructuring and other costs

 

 

28

 

 

 

6

 

 

 

—

 

 

 

22

 

 

 

52

 

 

 

11

 

 

 

—

 

 

 

41

 

Non-recurring costs related to regulatory or accounting changes

 

 

7

 

 

 

1

 

 

 

—

 

 

 

6

 

 

 

1

 

 

 

—

 

 

 

—

 

 

 

1

 

Net (gain) loss on divestiture

 

 

(59

)

 

 

(13

)

 

 

—

 

 

 

(46

)

 

 

1

 

 

 

1

 

 

 

—

 

 

 

—

 

Pension expense - non operating

 

 

15

 

 

 

3

 

 

 

—

 

 

 

12

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Noncontrolling interests

 

 

20

 

 

 

—

 

 

 

(20

)

 

 

—

 

 

 

(80

)

 

 

—

 

 

 

80

 

 

 

—

 

Subtotal: Non-Fortitude Re reconciling items

 

 

187

 

 

 

57

 

 

 

(20

)

 

 

110

 

 

 

(199

)

 

 

10

 

 

 

80

 

 

 

(129

)

Total adjustments

 

 

(75

)

 

 

(3

)

 

 

(20

)

 

 

(92

)

 

 

(2,715

)

 

 

(532

)

 

 

80

 

 

 

(2,103

)

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

 

$

836

 

 

$

157

 

 

$

—

 

 

$

679

 

 

$

611

 

 

$

120

 

 

$

—

 

 

$

491

 

(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 June 30, 2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Premiums

 

$

66

 

$

4

 

$

443

 

 

$

1,911

 

$

20

 

 

$

—

 

 

$

2,444

Policy fees

 

 

172

 

 

102

 

 

371

 

 

 

49

 

 

—

 

 

 

—

 

 

 

694

Net investment income

 

 

1,224

 

 

504

 

 

327

 

 

 

407

 

 

19

 

 

 

(1

)

 

 

2,480

Net realized gains (losses)(a)

 

 

—

 

 

—

 

 

—

 

 

 

—

 

 

1

 

 

 

—

 

 

 

1

Advisory fee and other income

 

 

108

 

 

76

 

 

26

 

 

 

—

 

 

16

 

 

 

—

 

 

 

226

Total adjusted revenues

 

 

1,570

 

 

686

 

 

1,167

 

 

 

2,367

 

 

56

 

 

 

(1

)

 

 

5,845

Policyholder benefits

 

 

71

 

 

6

 

 

721

 

 

 

2,081

 

 

(3

)

 

 

—

 

 

 

2,876

Interest credited to policyholder account balance

 

 

553

 

 

294

 

 

85

 

 

 

133

 

 

—

 

 

 

—

 

 

 

1,065

Amortization of deferred policy acquisition costs

 

 

138

 

 

20

 

 

98

 

 

 

2

 

 

—

 

 

 

—

 

 

 

258

Non-deferrable insurance commissions

 

 

94

 

 

33

 

 

21

 

 

 

4

 

 

1

 

 

 

—

 

 

 

153

Advisory fee expenses

 

 

36

 

 

29

 

 

(1

)

 

 

—

 

 

—

 

 

 

—

 

 

 

64

General operating expenses

 

 

104

 

 

107

 

 

167

 

 

 

21

 

 

85

 

 

 

—

 

 

 

484

Interest expense

 

 

—

 

 

—

 

 

—

 

 

 

—

 

 

129

 

 

 

—

 

 

 

129

Total benefits and expenses

 

 

996

 

 

489

 

 

1,091

 

 

 

2,241

 

 

212

 

 

 

—

 

 

 

5,029

Noncontrolling interest

 

 

—

 

 

—

 

 

—

 

 

 

—

 

 

20

 

 

 

—

 

 

 

20

Adjusted pre-tax operating income

 

$

574

 

$

197

 

$

76

 

 

$

126

 

$

(136

)

 

$

(1

)

 

$

836

(in millions)

 

Individual Retirement

 

Group Retirement

 

Life Insurance

 

Institutional Markets

 

Corporate & Other

 

Eliminations

 

Total Corebridge

Three Months Ended June 30, 2022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Premiums

 

$

60

 

$

5

 

$

440

 

$

496

 

$

21

 

 

$

—

 

 

$

1,022

 

Policy fees

 

 

186

 

 

104

 

 

390

 

 

49

 

 

—

 

 

 

—

 

 

 

729

 

Net investment income

 

 

901

 

 

488

 

 

350

 

 

239

 

 

136

 

 

 

(5

)

 

 

2,109

 

Net realized gains (losses)(a)

 

 

—

 

 

—

 

 

—

 

 

—

 

 

—

 

 

 

—

 

 

 

—

 

Advisory fee and other income

 

 

115

 

 

73

 

 

30

 

 

—

 

 

32

 

 

 

(5

)

 

 

245

 

Total adjusted revenues

 

 

1,262

 

 

670

 

 

1,210

 

 

784

 

 

189

 

 

 

(10

)

 

 

4,105

 

Policyholder benefits

 

 

77

 

 

13

 

 

734

 

 

612

 

 

—

 

 

 

—

 

 

 

1,436

 

Interest credited to policyholder account balance

 

 

466

 

 

286

 

 

87

 

 

71

 

 

—

 

 

 

—

 

 

 

910

 

Amortization of deferred policy acquisition costs

 

 

126

 

 

20

 

 

104

 

 

2

 

 

—

 

 

 

—

 

 

 

252

 

Non-deferrable insurance commissions

 

 

86

 

 

30

 

 

29

 

 

5

 

 

1

 

 

 

—

 

 

 

151

 

Advisory fee expenses

 

 

35

 

 

30

 

 

—

 

 

—

 

 

—

 

 

 

—

 

 

 

65

 

General operating expenses

 

 

107

 

 

112

 

 

159

 

 

18

 

 

96

 

 

 

(6

)

 

 

486

 

Interest expense

 

 

—

 

 

—

 

 

—

 

 

—

 

 

128

 

 

 

(14

)

 

 

114

 

Total benefits and expenses

 

 

897

 

 

491

 

 

1,113

 

 

708

 

 

225

 

 

 

(20

)

 

 

3,414

 

Noncontrolling interest

 

 

—

 

 

—

 

 

—

 

 

—

 

 

(80

)

 

 

—

 

 

 

(80

)

Adjusted pre-tax operating income

 

$

365

 

$

179

 

$

97

 

$

76

 

$

(116

)

 

$

10

 

 

$

611

 

(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 June 30,

(in millions)

 

2023

 

2022

Individual Retirement

 

 

 

 

Spread income

 

$

684

 

$

448

Fee income

 

 

280

 

 

301

Total Individual Retirement

 

 

964

 

 

749

Group Retirement

 

 

 

 

Spread income

 

 

213

 

 

205

Fee income

 

 

178

 

 

177

Total Group Retirement

 

 

391

 

 

382

Life Insurance

 

 

 

 

Underwriting margin

 

 

361

 

 

389

Total Life Insurance

 

 

361

 

 

389

Institutional Markets

 

 

 

 

Spread income

 

 

117

 

 

67

Fee income

 

 

16

 

 

16

Underwriting margin

 

 

20

 

 

19

Total Institutional Markets

 

 

153

 

 

102

Total

 

 

 

 

Spread income

 

 

1,014

 

 

720

Fee income

 

 

474

 

 

494

Underwriting margin

 

 

381

 

 

408

Total

 

$

1,869

 

$

1,622

The following table presents Life Insurance underwriting margin:

 

 

Three Months Ended June 30,

(in millions)

 

 

2023

 

 

 

2022

 

Premiums

 

$

443

 

 

$

440

 

Policy fees

 

 

371

 

 

 

390

 

Net investment income

 

 

327

 

 

 

350

 

Other income

 

 

26

 

 

 

30

 

Policyholder benefits

 

 

(721

)

 

 

(734

)

Interest credited to policyholder account balances

 

 

(85

)

 

 

(87

)

Underwriting margin

 

$

361

 

 

$

389

 

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

 

 

Three Months Ended June 30,

(in millions)

 

 

2023

 

 

 

2022

 

Premiums

 

$

1,921

 

 

$

505

 

Net investment income

 

 

371

 

 

 

203

 

Policyholder benefits

 

 

(2,070

)

 

 

(597

)

Interest credited to policyholder account balances

 

 

(105

)

 

 

(44

)

Spread income(a)

 

$

117

 

 

$

67

 

SVW fees

 

 

16

 

 

 

16

 

Fee income

 

$

16

 

 

$

16

 

Premiums

 

 

(10

)

 

 

(9

)

Policy fees (excluding SVW)

 

 

33

 

 

 

33

 

Net investment income

 

 

36

 

 

 

37

 

Other income

 

 

—

 

 

 

—

 

Policyholder benefits

 

 

(11

)

 

 

(15

)

Interest credited to policyholder account balances

 

 

(28

)

 

 

(27

)

Underwriting margin(b)

 

$

20

 

 

$

19

 

(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 June 30,

(in millions, except per common share data)

 

 

2023

 

 

 

2022

GAAP Basis

 

 

 

 

Numerator for EPS

 

 

 

 

Net income (loss)

 

$

751

 

 

$

2,674

Less: Net income (loss) attributable to noncontrolling interests

 

 

(20

)

 

 

80

Net income (loss) attributable to Corebridge common shareholders

 

$

771

 

 

$

2,594

 

 

 

 

 

Denominator for EPS(a)

 

 

 

 

Weighted average common shares outstanding - basic

 

 

650.7

 

 

 

645.0

Dilutive common shares(b)

 

 

1.5

 

 

 

—

Weighted average common shares outstanding - diluted

 

 

652.2

 

 

 

645.0

 

 

 

 

 

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

 

 

 

 

Common stock - basic

 

$

1.18

 

 

$

4.02

Common stock - diluted

 

$

1.18

 

 

$

4.02

 

 

 

 

 

Operating Basis(a)

 

 

 

 

Adjusted after-tax operating income attributable to Corebridge shareholders

 

$

679

 

 

$

491

Weighted average common shares outstanding - diluted

 

 

652.2

 

 

 

645.0

Operating earnings per common share

 

$

1.04

 

 

$

0.76

(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 the reconciliation of Adjusted Book Value:

At Period End

June 30, 2023

 

March 31, 2023

 

June 30, 2022

(in millions, except per share data)

 

 

 

 

 

Total Corebridge shareholders' equity (a)

$

10,561

 

 

$

11,555

 

 

$

12,251

 

Less: Accumulated other comprehensive income (AOCI)

 

(15,182

)

 

 

(14,067

)

 

 

(12,106

)

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

 

(2,568

)

 

 

(2,365

)

 

 

(1,723

)

Total adjusted book value (b)

$

23,175

 

 

$

23,257

 

 

$

22,634

 

Total common shares outstanding (c)(1)

 

636.0

 

 

 

648.1

 

 

 

645.0

 

Book value per common share (a/c)

$

16.61

 

 

$

17.83

 

 

$

18.99

 

Adjusted book value per common share (b/c)

$

36.44

 

 

$

35.88

 

 

$

35.09

 

(1)

 

Total common shares outstanding are presented net of treasury stock

The following table presents the reconciliation of Adjusted ROAE:

 

 

Three Months Ended June 30,

(in millions, unless otherwise noted)

 

 

2023

 

 

 

2022

 

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

 

$

3,084

 

 

$

10,376

 

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

 

 

2,716

 

 

 

1,964

 

Average Corebridge shareholders’ equity (c)

 

 

11,058

 

 

 

16,140

 

Less: Average AOCI

 

 

(14,625

)

 

 

(7,066

)

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

 

 

(2,467

)

 

 

(734

)

Average Adjusted Book Value (d)

 

$

23,216

 

 

$

22,472

 

Return on Average Equity (a/c)

 

 

27.9

%

 

64.3

%

Adjusted ROAE (b/d)

 

 

11.7

%

 

8.7

%

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

 

 

Three Months Ended June 30,

(in millions)

 

 

2023

 

 

 

2022

 

Net investment income (net income basis)

 

$

2,714

 

 

$

2,280

 

Net investment (income) on Fortitude Re funds withheld assets

 

 

(270

)

 

 

(182

)

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

 

 

(14

)

 

 

(13

)

Other adjustments

 

 

(5

)

 

 

(12

)

Derivative income recorded in net realized investment gains (losses)

 

 

55

 

 

 

36

 

Total adjustments

 

 

(234

)

 

 

(171

)

Net investment income (APTOI basis)(a)

 

$

2,480

 

 

$

2,109

 

(a)

 

Includes net investment income (loss) from Corporate and Other of $18 million and $131 million for the three months ended June 30, 2023 and June 30, 2022, respectively

The following table presents the premiums and deposits:

 

 

Three Months Ended June 30,

(in millions)

 

 

2023

 

 

 

2022

 

Individual Retirement

 

 

 

 

Premiums

 

$

66

 

 

$

60

 

Deposits

 

 

3,984

 

 

 

3,566

 

Other(a)

 

 

(5

)

 

 

(6

)

Premiums and deposits

 

 

4,045

 

 

 

3,620

 

Group Retirement

 

 

 

 

Premiums

 

 

4

 

 

 

5

 

Deposits

 

 

1,919

 

 

 

1,767

 

Premiums and deposits(b)(c)

 

 

1,923

 

 

 

1,772

 

Life Insurance

 

 

 

 

Premiums

 

 

443

 

 

 

440

 

Deposits

 

 

384

 

 

 

389

 

Other(a)

 

 

236

 

 

 

220

 

Premiums and deposits

 

 

1,063

 

 

 

1,049

 

Institutional Markets

 

 

 

 

Premiums

 

 

1,911

 

 

 

496

 

Deposits

 

 

991

 

 

 

46

 

Other(a)

 

 

8

 

 

 

8

 

Premiums and deposits

 

 

2,910

 

 

 

550

 

Total

 

 

 

 

Premiums

 

 

2,424

 

 

 

1,001

 

Deposits

 

 

7,278

 

 

 

5,768

 

Other(a)

 

 

239

 

 

 

222

 

Premiums and deposits

 

$

9,941

 

 

$

6,991

 

(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 $720 million and $739 million for the three months ended June 30, 2023 and June 30, 2022, respectively

(c)

 

Excludes client deposits into advisory and brokerage accounts of $580 million and $579 million for the three months ended June 30, 2023 and June 30, 2022, respectively

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20230803687393/en/

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