8-K: F&G Annuities & Life Reports Strong Fourth Quarter and Full Year 2024 Results, Driven by Record Sales and AUM Growth

F&G Annuities & Life reports a successful year with record sales and assets under management, leading to increased profitability and shareholder returns.

Summary

• F&G Annuities & Life reported net earnings attributable to common shareholders for Q4 2024 of $323 million, or $2.50 per diluted share, compared to a net loss of $299 million, or $2.41 per share, for Q4 2023.
• Full year net earnings attributable to common shareholders were $622 million, or $4.88 per share, compared to a net loss of $58 million, or $0.47 per share, for the year ended December 31, 2023.
• Adjusted net earnings for Q4 2024 were $143 million, or $1.12 per share, compared to $75 million, or $0.60 per share, for Q4 2023.
• Full year adjusted net earnings were $546 million, or $4.30 per share, compared to $335 million, or $2.68 per share, for the year ended December 31, 2023.
• Gross sales for the full year reached a record $15.3 billion, a 16% increase over 2023, driven by record retail and pension risk transfer sales.
• Assets under management (AUM) before flow reinsurance reached a record $65.3 billion at the end of Q4, a 17% increase over Q4 2023.
• The company's estimated risk-based capital (RBC) ratio for its primary operating subsidiary was over 410% as of December 31, 2024, exceeding the 400% target.
• F&G returned $32 million and $125 million of capital to shareholders from common and preferred dividends in the fourth quarter and full year 2024, respectively.

Sentiment

Score: 8

Explanation: The document presents a positive outlook with strong financial results, record sales, and growth in AUM. The company's strategic initiatives and capital management contribute to a favorable sentiment.

Positives

• Record full year sales growth of 16% driven by retail and pension risk transfer sales.
• Record AUM before flow reinsurance of $65.3 billion, a 17% increase year-over-year.
• ROA expansion to 127 basis points for full year 2024.
• ROE expansion to over 12% for full year 2024, excluding AOCI and significant items.
• Strong solvency with an estimated RBC ratio over 410%.
• Capital returned to shareholders increased from $101 million in 2023 to $125 million in 2024.

Negatives

• Gross sales of $3.5 billion for the fourth quarter, a 15% decrease from the near record fourth quarter of 2023.
• Retail channel sales were $2.5 billion for the fourth quarter, a decrease of 17% from the fourth quarter of 2023; this reflects our decision to allocate capital to indexed annuity sales given the ongoing favorable economic conditions and strong demand for retirement savings products, resulting in a reduction in MYGA sales.

Risks

• The company's performance is subject to general economic conditions, interest rate fluctuations, and equity market volatility.
• Regulatory changes or actions could impact the underwriting of insurance products and the ability of insurance subsidiaries to make cash distributions.
• Changes in assumptions and estimates regarding amortization of deferred acquisition costs could affect financial results.
• The company faces credit risk from its counterparties.

Future Outlook

F&G enters 2025 with strong momentum and expects to further grow AUM before flow reinsurance and adjusted net earnings.

Management Comments

• We reported record gross sales of $15.3 billion for the full year 2024, a 16% increase over 2023.
• Notably, gross sales have more than tripled since 2020.
• During 2024, we achieved record full year retail channel and pension risk transfer sales due to favorable market conditions and secular demand for our products that is poised to persist.
• Lastly, we continue to execute our capital light, strategic initiatives through utilizing flow reinsurance and growing our owned distribution business which, taken together, offer F&G a higher return earnings stream.

Industry Context

The announcement reflects a broader trend in the insurance industry towards growth in annuity and pension risk transfer markets, driven by demographic shifts and market conditions.

Comparison to Industry Standards

• The company's RBC ratio of over 410% is strong compared to the industry standard target of 400%.
• F&G's growth in AUM and sales is competitive within the insurance solutions sector, particularly in retail annuity and pension risk transfer markets.
• Comparable companies in the annuity and life insurance space include Athene, Apollo Global Management (which acquired Athene), and Global Atlantic Financial Group.

Stakeholder Impact

• Shareholders benefit from increased earnings and capital returns.
• Customers benefit from the company's strong financial position and product offerings.
• Employees benefit from the company's growth and success.
• The company's strong solvency benefits creditors.

Next Steps

• Members of F&G's senior management team will host a conference call with the investment community to discuss F&G's fourth quarter and full year 2024 results on Friday, February 21, 2025.

Key Dates