10-K: F&G Annuities & Life Reports Mixed 2025 Results Amid Strategic Shift

F&G Annuities & Life, Inc. reported a significant drop in net earnings for 2025 to $265 million, despite continued AUM growth and strategic diversification efforts.

Summary

• Net earnings attributable to F&G decreased to $265 million in 2025 from $639 million in 2024, following a net loss of $(58) million in 2023.
• Adjusted net earnings attributable to F&G common shareholders were $482 million in 2025, down from $546 million in 2024, but up from $335 million in 2023.
• Assets Under Management (AUM) grew to $57.6 billion as of December 31, 2025, representing a 7% annual increase and a 17% compound annual growth rate since 2019.
• Gross sales for 2025 were $14.6 billion, a modest decrease from $15.262 billion in 2024, but higher than $13.153 billion in 2023.
• Net sales for 2025 were $10.029 billion, compared to $10.571 billion in 2024 and $9.238 billion in 2023.
• FGL Insurance's estimated U.S. Risk-Based Capital (RBC) ratio was approximately 430% as of December 31, 2025, exceeding the target of 400%.
• Investment income from alternative investments in 2025 was $278 million below management's long-term expected return of approximately 10%.
• The company completed a public offering of 8,000,000 shares of common stock on March 24, 2025, raising net proceeds of $269 million.
• F&G redeemed $300 million of its 5.50% Senior Notes on February 1, 2025, and issued $375 million of 7.300% Junior Subordinated Notes due 2065 on January 13, 2025.
• Strategic acquisitions in 2024 included a 70% majority stake in Roar Joint Venture, LLC (January 2, 2024) and a 100% ownership stake in PALH, LLC (July 18, 2024).
• A new strategic partnership with a reinsurance vehicle backed by Blackstone-managed funds was launched, effective August 1, 2025, with approximately $1 billion in anticipated capital commitments.
• Fidelity National Financial, Inc. (FNF) distributed approximately 12% of F&G common stock on December 31, 2025, retaining approximately 70% ownership.
• The company expanded its product and distribution capabilities from one primary channel to five, and from one primary product to six, including entry into the RILA markets in early 2024.

Sentiment

Score: 6

Explanation: StockSavvy.ai views this as a mixed but generally positive report, highlighting strong strategic growth and capital position, but noting a significant drop in net earnings and underperformance in alternative investments for the year.

Positives

• Achieved significant AUM growth, with a 17% compound annual growth rate from 2019 to 2025 and a 7% increase in 2025.
• Successfully diversified its business model from one primary channel and product to five channels and six products, including expansion into bank and broker-dealer channels.
• Maintains a high-quality investment portfolio, with 96% of fixed maturity securities rated NAIC 1 or NAIC 2.
• Demonstrates a robust capital position, with FGL Insurance's U.S. RBC ratio at 430%, exceeding the 400% target.
• Executing a strategic shift towards a more fee-based, higher margin, and less capital-intensive business model.
• Experienced strong IUL sales growth, outpacing the industry with a three-year combined annual growth rate of 24% compared to the industry's 7%.
• Maintained low credit-related impairments, averaging 6 basis points over the past 5 years, which is below pricing assumptions.
• Recognized as an employer of choice with a low involuntary turnover rate, indicating strong talent management and employee satisfaction.
• Maintained effective internal controls over financial reporting, as affirmed by management and external auditors.

Negatives

• Net earnings attributable to F&G significantly decreased to $265 million in 2025 from $639 million in 2024.
• Adjusted net earnings attributable to common shareholders also decreased to $482 million in 2025 from $546 million in 2024.
• Investment income from alternative investments was $278 million below management's long-term expected return of approximately 10% in 2025.
• Gross sales were modestly lower in 2025 ($14.6 billion) compared to 2024 ($15.262 billion).
• Experienced net realized and unrealized losses of $(45) million on fixed maturity available-for-sale securities, equity securities, and other invested assets in 2025.
• Reported market risk benefit losses of $167 million in 2025, a significant shift from gains of $25 million in 2024, reflecting unfavorable market-related movements and policyholder behavior.
• Higher interest rates led to a decrease in the fair value of the investment security portfolio, resulting in an Accumulated Other Comprehensive Income (AOCI) loss of $1.5 billion in 2025.
• One commercial mortgage loan (CML) was delinquent in principal or interest payments as of December 31, 2025.
• A total of $79 million in mortgage loans were over 90 days past due as of December 31, 2025.
• Residential mortgage loans totaling $111 million were in the process of foreclosure as of December 31, 2025.
• FGL Insurance's maximum ordinary dividend capacity for 2026 is $0, limiting cash distributions to the parent company.
• FGL NY Insurance's maximum ordinary dividend capacity for 2026 is approximately $27 million, also restricting cash flow to the parent.
• Certain reinsurance subsidiaries (Corbeau Re and F&G Cayman Re) would fall below minimum regulatory RBC requirements without permitted statutory accounting practices.

Risks

• Debt instruments may restrict current and future operations, limiting the ability to respond to changes or take certain actions.
• The ability to grow depends significantly on the continued availability of capital.
• A financial strength ratings downgrade or other negative action by a rating agency could increase the cost of capital, hinder business growth, and adversely affect results.
• The company may face losses if actual experience differs significantly from reserving assumptions, particularly for GMWB utilization.
• Valuation of investments and impairment determinations involve methodologies, estimates, and assumptions subject to differing interpretations, which could materially affect financial results.
• Changes in the evaluation of the recoverability of deferred tax assets could materially adversely affect results of operations and financial condition.
• Goodwill recorded from past acquisitions could become impaired, requiring write-downs that would reduce operating income.
• Inability to attract and retain national marketing organizations and independent agents may reduce product sales.
• Operating in a highly competitive industry could limit the ability to gain or maintain market position and materially adversely affect business, financial condition, and results of operations.
• Concentration in certain states (California, Florida, Pennsylvania, Texas, and New Jersey) for product distribution may lead to losses from economic downturns or catastrophes in those regions.
• Concentration in one or more products may subject the company to greater volatility of sales if those products experience a significant decrease.
• Exposure to credit risk of counterparties, including reinsurers (Aspida, Somerset, Everlake, Wilton Re, Fort Greene) and derivative counterparties, could lead to financial losses.
• Operational difficulties or increased costs may arise from outsourcing relationships if third-party providers do not perform as contracted.
• The loss of key personnel could negatively affect financial results and impair the ability to implement business strategy.
• Risk management policies and procedures may not capture unidentified or unanticipated risks, potentially leading to unexpected monetary losses or reputational damage.
• Acquisitions of minority and/or majority ownership in Independent Marketing Organizations (IMOs) present integration, due diligence, market condition, reputational, financial, and regulatory risks.
• Interruption or other operational failures in telecommunication, information technology, and other operational systems, or security breaches (e.g., MOVEit incident), could compromise sensitive data, interfere with operations, and incur significant costs and legal liability.
• Advancements in Artificial Intelligence, Machine Learning, and Large Language Models (AI/ML/LLM) pose risks and challenges, including reputational harm, liability, and an uncertain regulatory environment.
• Reliance on investment management advisory agreements with Blackstone ISG-I Advisors LLC (BIS) and other investment managers limits the ability to terminate relationships or retain other managers without BIS's consent.
• The historical performance of BIS or any other asset manager should not be considered indicative of future investment portfolio results.
• Increased regulation or scrutiny of alternative investment advisers and investment activities may affect BIS's ability to manage the investment portfolio or impact the company's reputation.
• General economic conditions, including prevailing interest and unemployment rates, stock and credit market performance, inflation, and geopolitical events, could adversely affect business.
• Investments are subject to market risks that could be heightened during periods of extreme volatility or disruption in financial and credit markets.
• Investments are subject to credit risks of the underlying issuer, borrower, or physical collateral, which can change with the credit cycle.
• Interest rate fluctuations could adversely affect business, financial condition, liquidity, and results of operations, including the risk of financial disintermediation.
• Equity market volatility could negatively impact the business, particularly the estimated cost of guaranteed minimum withdrawal benefit riders.
• Exposure to liquidity risk arises from derivative collateral market exposure, asset-liability mismatch, insurance cash flows, FHLB collateral, and the Kubera NPA.
• The business could be materially and adversely affected by the occurrence of catastrophes, including natural or man-made disasters, pandemics, and malicious acts.
• The owned distribution strategy and investments in distribution consolidators expose the business to operational, financial, and strategic risks.
• The business is highly regulated and subject to numerous legal restrictions and regulations, with broad administrative and discretionary authority by government regulators.
• Risks associated with a shutdown of the United States Government could disrupt operations, delay regulatory approvals, and impede access to capital markets.
• The National Association of Insurance Commissioners (NAIC) continues to consider reforms related to cybersecurity regulations, best interest standards, risk-based capital (RBC), and life insurance reserves, which could impact the business.
• Current and emerging developments relating to market conduct standards for the financial industry, particularly the DOL's implementation of the fiduciary rule, may materially affect agent business practices, IMO roles, IRA product sales, supervision, compensation, and liability exposure.
• Regulation in Bermuda and the Cayman Islands may limit or curtail activities and affect the ability to offer existing or new products and services.
• The SECURE 2.0 Act of 2022 may impact the business and the markets in which the company competes.
• The amount of statutory capital that insurance subsidiaries have and must hold can vary significantly due to factors outside the company's control.
• New accounting rules or changes to existing accounting standards could adversely impact reported results of operations.
• Changes in federal or state tax laws may affect sales of products and profitability.
• Changes in tax law may increase future tax liabilities and related compliance costs.
• The redemption of preferred stock may require a significant amount of cash and could result in adverse tax consequences.
• The company may be the target of future litigation, law enforcement investigations, or increased scrutiny, which may negatively affect operations or financial strength.
• Inability to protect intellectual property or being subject to infringement claims could adversely impact business and competitive ability.
• Changing rules, public disclosure regulations, and stakeholder expectations on environmental, social, and corporate governance (ESG) related matters create a variety of risks.
• As a holding company, F&G depends on distributions from its subsidiaries for cash, which are subject to regulatory limitations.
• Historical financial information may not be representative of the results achieved as a separate, publicly traded company.
• FNF, as the principal shareholder, retains significant rights with respect to governance and corporate actions, potentially leading to conflicts of interest.
• Certain directors may have actual or potential conflicts of interest due to FNF equity ownership or positions.
• Provisions in the amended and restated certificate of incorporation and bylaws, and Delaware law, may prevent or delay an acquisition.
• The company's status as a controlled company under NYSE rules allows exemptions from certain corporate governance requirements.
• FNF or F&G may fail to perform under various transaction agreements executed as part of the separation and distribution.
• Indemnification agreements with FNF may not be sufficient to hold the company harmless from all allocated liabilities.
• Terms received in agreements with FNF may have been less favorable than those from unaffiliated third parties.
• Insurance holding company laws may restrict persons from acquiring control of an insurance company, potentially impacting investment in common stock.
• The exclusive forum provision in the amended and restated bylaws could limit shareholders' ability to choose a judicial forum for certain disputes.
• Consolidated federal income tax returns with FNF (ending 2025) may impact tax attributes and future tax liabilities.
• The stock price may fluctuate significantly due to various market and company-specific factors.
• Inability to implement and maintain the effectiveness of internal control over financial reporting could adversely affect stock price.
• Common stock is subordinated to preferred stock.
• Substantial sales of common stock may occur, causing stock price volatility and decline.
• The company cannot guarantee the timing, amount, or payment of dividends on common stock or preferred stock in the future.
• Percentage of ownership in F&G may be diluted in the future due to equity issuances.

Future Outlook

F&G expects to maintain its U.S. Risk-Based Capital (RBC) ratio at or above its target of 400% and is positioned for continued growth by balancing its fee-based business expansion with disciplined growth in spread-based products. The company anticipates ongoing macroeconomic uncertainty in fiscal year 2026 but believes the aging U.S. population will drive increased demand for retirement solutions. F&G plans to continue monitoring GMWB utilization assumptions, adjusting its hedging strategy as market conditions evolve, and evaluating the impact of tax reforms. The company intends to pay regular quarterly dividends, subject to Board and regulatory approvals, and has a remaining stock repurchase authorization of $32 million through November 2026.

Management Comments

• "Our mission is to help people turn their aspirations into reality."
• "We believe the strength of our balance sheet provides confidence to our policyholders and business partners and positions us for continued growth."
• "We are uniquely positioned in the industry with a profitable and growing $56.8 billion inforce block."
• "As our business grows, we are becoming a more fee-based, higher margin and capital light business, leveraging our position as one of the industry's largest sellers of annuities and life insurance."
• "We are balancing this with continuing to grow our spread-based business, prioritizing pricing discipline and allocating capital to the highest return opportunities."
• "Our commitment to our cultural values is the cornerstone of our success, whereby F&G is a company of individuals who believe in the power of partnerships, encourage innovation and creativity, and are transparent about decisions while delivering on their commitments."
• "We believe our flexible, employee-centric work approach positions us as an employer of choice."
• "We do not believe these restrictions, covenants or limitations will have a material impact on the Company’s current or future operations." (Regarding debt instruments)
• "At this time, F&G does not believe the lawsuit will have a material impact on its business, operations, or financial results." (Regarding Insurance Distribution Consulting, LLC v. Fidelity & Guaranty Life Insurance Company)
• "At this time, F&G does not believe the incident will have a material impact on its business, operations, or financial results." (Regarding MOVEit class action lawsuits)

Industry Context

StockSavvy.ai notes that F&G operates in a large and growing U.S. retirement market, benefiting from powerful demographic trends with over 11,000 Americans turning 65 daily. The increasing demand for guaranteed income solutions positions F&G's fixed annuity products well against market volatility. The company's strategic focus on the underserved middle market for life insurance, particularly through Network Marketing Groups, aligns with a significant market gap where 42% of adults need life insurance or more coverage. The expansion into institutional markets like Pension Risk Transfer (PRT) and Funding Agreement Backed Notes (FABN) leverages F&G's asset management capabilities, tapping into a substantial market as corporations de-risk pension funds. The industry is also seeing increased regulatory scrutiny on AI/ML/LLM and market conduct standards, which F&G is actively monitoring.

Comparison to Industry Standards

• F&G ranks 5th and 10th in FIA sales in the IMO and bank channels, respectively, and 6th in overall FIA industry sales.
• F&G ranks 9th and 7th in MYGA sales in the broker-dealer and bank channels, respectively, and 11th in overall MYGA industry sales.
• F&G ranks 5th in IUL sales in the IMO channel, 8th in the number of IUL policies sold, and 7th in overall IUL industry sales.
• F&G's IUL sales growth has far outpaced the industry, with a three-year combined annual growth rate of 24% compared to the industry's 7%.
• F&G ranked 7th in the PRT industry sales for year-to-date sales through September 30, 2025.
• F&G's involuntary turnover rate is well below that of other financial services companies.

Corporate Governance

Legal Proceedings

• Fidelity & Guaranty Life Insurance Company (FGL Insurance) is a defendant in a lawsuit, *Insurance Distribution Consulting, LLC v. Fidelity & Guaranty Life Insurance Company*, alleging failure to pay commissions (over $162 million) and discrimination (over $11 million) related to IMO customer Syncis and Freedom Equity Group. FGL Insurance denies the allegations and has filed motions for summary judgment, with a decision pending.
• Peak Altitude Equity, LLC (Peak), a subsidiary, is a defendant in a counterclaim by Insurance Distribution Consulting, LLC (IDC) in *Syncis Insurance Solutions, LLC v. Insurance Distribution Consulting, LLC*, with alleged facts overlapping the FGL Insurance lawsuit. Peak has filed a motion to dismiss.
• F&G is a defendant in two putative class action lawsuits (*Miller v. F&G* and *Cooper v. Progress Software Corp.*) related to the June 2023 MOVEit file transfer system cybersecurity incident, alleging compromise of customer personal information and common law tort/implied contract claims. These cases have been transferred to a multidistrict litigation (MDL) for consolidated proceedings.
• The company routinely receives inquiries and requests for information from state insurance departments, attorneys general, and other regulatory agencies, which may result in fines or settlements.

Related Party Transactions

• Fidelity National Financial, Inc. (FNF) is the principal shareholder, owning approximately 70% of F&G's outstanding common stock and 5,000,000 shares of FNF Preferred Stock.
• F&G has a Separation Agreement, Corporate Services Agreement, Reverse Corporate Services Agreement, and Tax Sharing Agreement with FNF, governing their post-separation relationship and allocation of assets/liabilities.
• Certain F&G subsidiaries are party to Investment Management Agreements (IMAs) with Blackstone ISG-I Advisors LLC (BIS), an entity affiliated with William P. Foley, II, F&G's Executive Chairman.
• MVB Management, LLC, 50% owned by BilCar (an affiliate of William P. Foley, II), receives participation fees from BIS for Assets Under Management (AUM). BilCar waived its right to receive payments for New AUM after March 31, 2023, with F&G agreeing to pay BilCar these fees directly. BilCar received $8 million in 2025 and $9 million in 2024 from MVB Management.
• F&G acquired a 70% majority ownership stake in Roar Joint Venture, LLC on January 2, 2024, and a 100% ownership stake in PALH, LLC on July 18, 2024, which are now consolidated subsidiaries.
• F&G purchased minority ownership stakes of 40% in DCMT Worldwide, LLC and 49% in Syncis Holdings, LLC in 2023, accounted for using the fair value option.
• F&G has a 10% ownership stake and 50% voting interest in Specialty Lending Company LLC, accounted for using the equity method.
• F&G has intercompany reinsurance agreements with wholly-owned captive reinsurance companies (Corbeau Re, Raven Re, F&G Cayman Re) for managing regulatory statutory capital and risk, with financial impacts eliminated in consolidation.

Stakeholder Impact

• Shareholders: Face potential for dilution from future equity issuances, stock price volatility, and the subordination of common stock to preferred stock. FNF's controlling interest may lead to differing interests.
• Policyholders/Customers: Benefit from products designed for retirement planning, principal protection, and guaranteed income. Exposed to risks from differences in reserving assumptions, market volatility affecting guarantees, and potential security breaches compromising personal information.
• Employees: Benefit from an attractive employee value proposition, development programs, comprehensive benefits, and a flexible work environment, contributing to low turnover. Risks include the potential impact of losing several key employees.
• Distributors/Agents: Relationships with Independent Marketing Organizations (IMOs), banks, and broker-dealers are crucial for sales. Face risks from ratings downgrades affecting competitiveness and changes in fiduciary standards impacting business practices and compensation.
• Creditors: Subject to restrictions imposed by debt instruments. Financial strength ratings directly affect borrowing costs and access to capital.

Next Steps

• The expected sale of F&G Life Re to Ancient Financial Holdings, LP, is anticipated to be completed on March 1, 2026.
• The DOL is expected to determine its position and next steps with the New Fiduciary Rule cases by March 2026.
• F&G will continue to monitor developments related to the New Fiduciary Rule and work with IMOs and distributors to adapt to evolving regulatory requirements and risks.
• F&G will continue to monitor risks and opportunities related to its climate risk assessment.
• The company intends to continue to adjust its hedging strategy as market conditions and risk tolerance change.
• F&G will continue to evaluate the impact of the Inflation Reduction Act and other tax reforms.
• F&G expects to pay regular quarterly dividends in the future, subject to Board review and regulatory approvals.
• The company has a remaining authorization of approximately $32 million for its stock repurchase program through November 6, 2026.
• FGL Insurance's maximum ordinary dividend capacity for 2026 is $0, and FGL NY Insurance's is approximately $27 million.
• The mandatory conversion of the FNF Preferred Stock is expected on January 15, 2027.
• FNF's lead regulator adopted a requirement for group capital reporting in late 2025, effective for year-end 2026, with filing required in the first half of 2027.

Key Dates

Recommendation

F&G demonstrates strong strategic growth, diversification, and a robust capital position, which are positive long-term indicators. However, the significant decline in net earnings for 2025 and underperformance in alternative investments, coupled with ongoing legal and regulatory uncertainties, suggest a cautious approach. The company is undergoing a transformation towards a more fee-based model, which could improve future profitability and capital efficiency, but this transition and its full impact are still unfolding. Therefore, a "hold" recommendation is appropriate as investors monitor the execution of its strategy and resolution of current challenges.

Keywords

Annuities, Life Insurance, Pension Risk Transfer, FIA, MYGA, RILA, IUL, SEC Filing, Financial Services, Investment Management, Blackstone, FNF, Capital Management, Risk Management, Corporate Governance, Insurance Regulation, Financial Performance, AUM, RBC, Dividends, Acquisitions, Cybersecurity, ESG, Debt Offering, Equity Offering