10-K: Equitable Holdings Reports $1.4B Net Loss in 2025 Amid Reinsurance Deals

Equitable Holdings posted a $1.4 billion net loss in 2025, a significant reversal from prior year profits, primarily driven by reinsurance transactions and legacy policy novation, despite positive Non-GAAP operating earnings.

Summary

• Equitable Holdings reported a net loss attributable to Holdings of $1.38 billion for the year ended December 31, 2025, a substantial decrease from $1.28 billion in net income in 2024.
• Non-GAAP Operating Earnings decreased by $263 million to $1.74 billion in 2025 from $2.00 billion in 2024.
• The company completed a master transaction agreement with RGA Reinsurance Company on July 31, 2025, ceding a 75% quota share of its in-force individual life insurance block and Closed Block, resulting in a $1.1 billion loss in investment gains (losses), net.
• A novation of certain legacy variable annuity policies in Q1 2025 resulted in a $499 million pre-tax net income loss.
• Total Assets Under Management (AUM) for the Asset Management segment increased by 9.4% to $866.9 billion as of December 31, 2025, driven by $86.0 billion in market appreciation, despite $11.3 billion in net outflows.
• Total Account Value (AV) for the Retirement segment grew by $23.7 billion to $174.9 billion in 2025, supported by $17.8 billion in investment performance and $5.9 billion in net inflows.
• Wealth Management Assets Under Administration (AUA) increased by $16.8 billion to $122.0 billion, with $8.4 billion from market appreciation and $8.4 billion from net new assets.
• The company repurchased approximately 28.4 million shares of common stock for $1.5 billion in 2025.
• An additional $1.5 billion and $500 million were approved for the share repurchase program in February and September 2025, respectively, with $1.0 billion remaining authorized capacity as of December 31, 2025.
• The annual review of actuarial assumptions in Q3 2025 resulted in an $80 million decrease in pre-tax income from continuing operations.
• A productivity program achieved $120 million of its $150 million run-rate expense savings target by December 31, 2025, with full achievement expected by 2027.

Sentiment

Score: 4

Explanation: StockSavvy.ai views this filing as moderately negative due to the significant GAAP net loss driven by one-time reinsurance and novation impacts, and a decline in Non-GAAP operating earnings. While AUM/AV growth and share repurchases are positive, the overall financial performance for 2025 is a concern.

Positives

• Non-GAAP Operating Earnings remained positive at $1.74 billion, indicating underlying business profitability despite significant one-time charges.
• Asset Management AUM increased by 9.4% to $866.9 billion, driven by strong market appreciation.
• Retirement segment AV grew by $23.7 billion to $174.9 billion, supported by investment performance and net inflows.
• Wealth Management AUA increased by $16.8 billion to $122.0 billion, with strong market appreciation and net new assets.
• The company returned capital to shareholders through $1.5 billion in share repurchases in 2025, with $1.0 billion remaining authorized capacity.
• A productivity program achieved $120 million of its $150 million run-rate expense savings target by year-end 2025, demonstrating operational efficiency improvements.
• Equitable Financial QP was reopened to provide cash balance allocations to eligible employees and financial professionals, enhancing employee benefits.
• The company maintained effective internal control over financial reporting as of December 31, 2025.
• Equitable America received approval for an Extraordinary Dividend of $1.7 billion in June 2025, with $1.5 billion distributed to Holdings in 2025.

Negatives

• Net income attributable to Holdings swung to a significant loss of $1.38 billion in 2025, compared to a profit of $1.28 billion in 2024.
• The RGA Reinsurance Transaction resulted in a $1.1 billion loss in investment gains (losses), net.
• The novation of certain Legacy VA policies led to a $499 million pre-tax net income loss.
• Non-GAAP Operating Earnings decreased by $263 million compared to the prior year.
• The Retirement segment's operating earnings decreased by $53 million.
• Corporate and Other operating losses increased significantly by $340 million to $599 million.
• Net flows in the Asset Management segment were negative $11.3 billion, driven by retail and institutional outflows.
• The annual actuarial assumption update in Q3 2025 resulted in an $80 million decrease in pre-tax income from continuing operations.
• A valuation allowance of $176 million was established on the deferred tax asset in 2025, compared to no valuation allowance in 2024.
• Accumulated Other Comprehensive Income (Loss) remained negative at $(6,280) million, though it improved from $(8,712) million in 2024.

Risks

• Business, results of operations, or financial condition are materially affected by conditions in the global capital markets and the economy, including geopolitical conflicts, changes in tariffs and trade barriers, equity market declines and volatility, interest rate fluctuations, and changes in liquidity and access to capital.
• Operational factors, including reliance on dividends from subsidiaries, protection of confidential customer information, operational failures by the company or service providers, potential strategic transactions, changes in accounting standards, and catastrophic events (e.g., pandemics).
• Credit, counterparties, and investments, including counterparty default on derivative contracts, failure of financial institutions, defaults by third parties, and economic downturns adversely affecting investments.
• Reinsurance and hedging programs may not be fully effective in reducing risks, and the company remains liable as the direct insurer on all reinsured risks.
• Products, structure, and product distribution, including variable annuity guaranteed benefits features, variations in statutory capital requirements, financial strength and claims-paying ratings, state insurance laws limiting dividend payments, and key product distribution relationships.
• Estimates, assumptions, and valuations, including risk management policies and procedures, potential inadequacy of reserves, experience differing from pricing expectations, amortization of deferred acquisition costs, and financial models.
• The Asset Management segment faces risks from fluctuations in assets under management and the industry-wide shift from actively-managed to passive investment services.
• Recruitment and retention of key employees and experienced and productive financial professionals is crucial for sales and business success.
• Subjectivity in determining the amount of allowances and impairments taken on investments can lead to material adverse effects.
• Legal and regulatory risks, including federal and state legislation affecting financial institutions, insurance regulation, tax reform, and increased scrutiny on ESG matters, AI, and big data.
• Risks related to common stock, including certain provisions in the certificate of incorporation and by-laws that may discourage takeovers.
• General risks, including strong industry competition, information systems failing or being compromised, and protecting intellectual property.

Future Outlook

The Federal Reserve signaled a more cautious approach for 2026 regarding interest rates. Management anticipates that Available Cash Flow for AllianceBernstein (AB) will typically be based on adjusted diluted net income per unit, unless determined otherwise by AB's management and Board. The company expects to achieve the full $150 million run-rate expense savings from its productivity program by 2027. Equitable America estimates an Ordinary Dividend capacity of $408 million in 2026, while Holdings does not expect to receive a dividend from Equitable Financial in 2026. Starting in 2028, the applicable interest crediting rate for Equitable Financial QP cash balance accounts will be based on the 10-year U.S. Treasury Yield (subject to a 6% cap). Regulatory changes are anticipated, with the NAIC developing a long-term solution for negative IMR balance (interim guidance effective December 31, 2026) and an amendment to assign risk weights to CLOs effective January 1, 2026. SEC rules for clearing eligible U.S. Treasury securities transactions will be effective by December 31, 2026, and repurchase transactions by June 30, 2027. The DOL intends to initiate new fiduciary rulemaking in May 2026. California's greenhouse gas emissions reporting law for large firms begins in 2026 for calendar year 2025, and updated CCPA regulations are effective January 1, 2026. The company expects AI and big data to remain important regulatory issues.

Management Comments

• "We believe that having an integrated business model enables us to better serve our clients while also generating flywheel benefits across the enterprise, as each franchise works in tandem to convert the higher investment returns we secure for our clients through our financial advice and asset management activities into higher sales and net flows of Equitable retirement products."
• "Our strategy is to participate across the retirement value chain by acting as a product manufacturer (Equitable), asset manager (AB), and distributor (Equitable Advisors)."
• "We believe that by prioritizing these areas [New Ways of Working], our business adapts with greater speed, agility, creativity and client focus."
• "Since going fully agile in 2024, we have seen higher employee Net Promoter Scores and teams responding to market conditions and client needs faster than ever before."
• "The companies that take the greatest care of their people are the ones that thrive over the long term."
• "We will continue to monitor the behavior of our customers and other factors... to ensure that our products and solutions remain attractive and profitable."
• "Management believes its fixed rate liabilities should be supported by a portfolio principally composed of fixed rate investments that generate predictable, steady rates of return."
• "Management believes the Company will not incur material losses as a result of these commitments [guarantees and other commitments]."
• "Management believes the need for the Company to satisfy those obligations [structured settlement agreements] is remote."
• "Management believes that neither the outcome of pending litigation and regulatory matters, nor potential liabilities associated with other loss contingencies, are likely to have such an effect [material adverse effect on financial position]."

Industry Context

StockSavvy.ai notes that Equitable Holdings operates within a highly competitive financial services landscape, facing competition from other life insurers, banks, mutual fund companies, and investment managers. The industry is experiencing increased regulatory scrutiny on complex assets, AI technologies, climate risk, and cybersecurity, which could impose additional compliance costs. The shift from actively-managed to passive investment services is an industry-wide trend that AllianceBernstein, as an active asset manager, must navigate. The company's integrated business model across retirement, asset management, and wealth management aims to create "flywheel benefits" and differentiate itself in a crowded market. The focus on digital platforms and "Holistic Life Planning" in Wealth Management aligns with broader industry trends towards personalized, technology-enabled financial advice.

Comparison to Industry Standards

• The insurance industry is highly competitive with no single provider dominating, and Equitable competes with other life insurers, banks, mutual fund companies, and investment managers.
• Product replication is a challenge in the annuity market, as competitors can quickly reproduce unique offerings.
• AllianceBernstein operates within an industry experiencing a shift from actively-managed to passive investment services, a key competitive factor.
• The company's insurance subsidiaries' Risk-Based Capital (RBC) ratios were in excess of required levels, indicating strong capitalization relative to regulatory standards.
• Equitable's regulatory framework is heavily influenced by NAIC standards, with New York's Regulation 213 imposing more conservative reserving requirements for variable annuities than the NAIC standard.
• The company's cybersecurity program leverages industry-leading frameworks like the National Institute of Standards and Technology Cyber Security Framework.
• Equitable achieved an 85% Corporate Engagement Index score in 2025, exceeding the industry benchmark of 82%.

Corporate Governance

Legal Proceedings

• The company is a defendant in a number of litigation matters and involved in regulatory investigations, including claims related to sales practices, agent misconduct, contract administration, product design, death benefits, unclaimed property, breach of fiduciary duties, and mismanagement of client funds.
• The aggregate range of reasonably possible losses in excess of accrued amounts is estimated to be up to approximately $100 million as of December 31, 2025.
• The SEC, FINRA, CFTC, and other governmental regulatory authorities may institute administrative or judicial proceedings resulting in censure, fines, cease-and-desist orders, trading prohibitions, or other sanctions.
• The DOL has pursued various proposed regulations to change the definition of fiduciary for ERISA purposes, which could impact the sale of insurance products to retirement investors.
• State attorneys general and other state officials have spoken out against ESG-motivated investing by some investment managers and terminated contracts.

Related Party Transactions

• Equitable is AllianceBernstein's largest client, representing 16% of AB's total AUM as of December 31, 2025, and 4% of AB's net revenues for the year ended December 31, 2025.
• ABLP is required to distribute all of its Available Cash Flow to holders of AB Units and to the General Partner (a wholly-owned subsidiary of Holdings).
• Holdings received cash distributions of $617 million from AB and $192 million from investment management contracts with EFIM and EIM in 2025.
• Holdings received cash distributions of $160 million from Equitable Advisors in 2025.
• Holdings made available to AB a $900 million committed, unsecured senior credit facility (EQH Facility), with $810 million outstanding as of December 31, 2025.
• AB has a $300 million uncommitted, unsecured senior credit facility with EQH (EQH Uncommitted Facility).
• Equitable Financial and Equitable America are members of the FHLB, providing access to collateralized borrowings.
• Equitable Financial and Equitable America may issue funding agreements to the FHLB.
• Equitable Financial and Equitable America may issue funding agreements under the FABN program.
• Equitable Financial and Equitable America established a FABCP program.
• The company provides certain guarantees or commitments to affiliates, including equity financing commitments of $1.2 billion to certain limited partnerships and real estate joint ventures.
• AB has a guarantee of unpaid obligations of a credit facility agreement its broker-dealer subsidiary of a joint venture, Bernstein Institutional Services, LLC, has with SocGen as lender, with a current commitment of $30 million.
• Holdings has tax sharing agreements with certain subsidiaries.
• Inter-segment investment management and other fees of $177 million (2025) are included in Asset Management segment revenues.
• Inter-segment distribution fees of $915 million (2025) are included in Wealth Management segment revenues.

Stakeholder Impact

• Shareholders are impacted by the net loss, decreased Non-GAAP operating earnings, share repurchase programs, and dividend policies. Potential for dilution exists if shares are issued for acquisitions.
• Policyholders/Clients are affected by product features, guarantees (GMxB), investment performance, and the company's financial strength ratings. Cybersecurity incidents could compromise confidential information.
• Employees/Financial Professionals are impacted by recruitment and retention efforts, compensation structures (equity awards), and changes in retirement plans (e.g., Equitable Financial QP reopening, AB Retirement Plan termination). Misconduct could lead to disciplinary action.
• Regulators are increasing scrutiny and imposing new regulations (e.g., on AI, climate risk, CLOs, cybersecurity), requiring significant compliance efforts and costs.
• Reinsurers/Counterparties are subject to the company's credit risk and ability to meet obligations under reinsurance and derivative contracts.
• Distribution Partners are affected by changes in distribution relationships and regulatory changes impacting sales and promotion.

Next Steps

• The DOL intends to initiate a new fiduciary rulemaking in May 2026.
• The NAIC is developing a long-term solution for negative IMR balance, with interim guidance effective December 31, 2026.
• The NAIC amendment to assign risk weights to CLOs based on its own modeling is effective January 1, 2026.
• SEC rules for clearing eligible secondary market transactions in U.S. Treasury securities will be effective by December 31, 2026, and eligible repurchase transactions by June 30, 2027.
• California law requiring firms with over $1.0 billion annual revenues to publicly report greenhouse gas emissions begins in 2026 for calendar year 2025.
• The CPPA adopted updated CCPA regulations in September 2025 (effective January 1, 2026) regarding cybersecurity audits, risk assessments, and AI.
• The company expects AI and big data to remain important issues for the NAIC and state insurance regulators.
• The company expects additional states to adopt the Insurance Data Security Model Law.
• Equitable America estimates an Ordinary Dividend capacity of $408 million in 2026.
• Holdings does not expect to receive a dividend from Equitable Financial in 2026.
• The applicable interest crediting rate for Equitable Financial QP cash balance accounts will be based on the 10-year U.S. Treasury Yield (subject to a 6% cap) starting in 2028.
• The productivity program is expected to achieve its full $150 million run-rate expense savings target by 2027.
• Holdings Board approved an additional $1.0 billion share repurchase program on February 11, 2026.

Key Dates

Recommendation

Equitable Holdings reported a significant GAAP net loss for 2025, primarily due to substantial one-time charges from reinsurance transactions and legacy policy novation. While Non-GAAP operating earnings remained positive, they declined year-over-year. The company demonstrates strong capital management through share repurchases and growth in AUM/AV across its segments. However, the magnitude of the GAAP loss and ongoing regulatory pressures, particularly in a volatile market environment, warrant a cautious "hold" stance. Investors should monitor the company's ability to integrate recent transactions, manage legacy risks, and sustain Non-GAAP profitability amidst a complex regulatory and economic backdrop.

Keywords

Financial Services, Insurance, Asset Management, Wealth Management, Annuities, Retirement Solutions, Equitable Holdings, AllianceBernstein, RGA Reinsurance, Legacy VA, Share Repurchase, AUM, AV, Non-GAAP Operating Earnings, Net Loss, Risk Management, Cybersecurity, Regulatory Compliance, Capital Markets, Interest Rates, Equity Markets, Corporate Governance, Financial Reporting