Brighthouse Financial, Inc.

Good morning, ladies and gentlemen, and welcome to Bright House Financial fourth quarter and full year 2023 earnings conference call. My name is Livia, and I'll be your coordinator today. At this time, all participants are on a listen-only mode. We will facilitate a question and answer session towards the end of the conference call. In fairness to all participants, please limit yourself to one question and one follow-up. As a reminder, this conference is being recorded for replay purposes. I would now like to send the presentation over to Dana Almonte, Head of Investor Relations. Ms. Almonte, you may proceed.

Thank you and good morning. Welcome to Bright House Financial's fourth quarter and full year 2023 earnings call. Materials for today's call were released last night and can be found on the investor relations section of our website. We encourage you to review all of these materials. Today, you will hear from Eric Stagerwald, our President and Chief Executive Officer and Ed Behar, our Chief Financial Officer. Following our prepared remarks, we will open the call up for a question and answer period. Also here with us today to participate in the discussions are Miles Lambert, our Chief Distribution and Marketing Officer, David Rosenbaum, Head of Product and Underwriting, and John Rosenthal, our Chief Investment Officer. Before we begin, I'd like to note that our discussion during this call may include forward-looking statements within the meaning of the federal securities laws. Bright House Financial's actual results may differ materially from the results anticipated in the forward-looking statements as a result of risks and uncertainties described from time to time in Bright House Financial's filings with the SEC. Information discussed on today's call speaks only as of today, February 13, 2024. The company undertakes no obligation to update any information discussed on today's call. During this call, we will be discussing certain financial measures that are not based on generally accepted accounting principles, also known as non-GAAP measures. Reconciliation of these non-GAAP measures on a historical basis to the most directly comparable GAAP measures and related definitions may be found in our earnings release, slide presentation, and financial supplement. And finally, references to statutory results including certain statutory-based measures used by management, are preliminary due to the timing of the filing of the statutory statements. And now, I'll turn the call over to our CEO, Eric Stagerwald.

Thank you, Dana, and good morning, everyone. Looking back on 2023, I'm proud of the progress we made as we continued to execute on our strategic priorities. We bought back a substantial amount of common stock, delivered strong sales results, enhanced and grew our core product suite, and nicely controlled expenses, all while maintaining our strong balance sheet and robust liquidity. We continue to return capital to shareholders through the company's common stock repurchase program. For the full year 2023, we repurchased $250 million of our common stock, reducing shares outstanding relative to year-end 2022 by approximately 7%, further demonstrating our ongoing commitment to return capital to our shareholders over time. In November, we announced a new share repurchase authorization of up to an additional $750 million. We delivered strong sales results and further strengthened our annuity and life insurance product portfolios. For full year 2023, total annuity sales were $10.6 billion, and total life insurance sales were $102 million, both of which exceeded our 2023 targets. Contributing to the strong total annuity sales results for the full year 2023 was a record sales year for our flagship SHIELD-level annuity products. SHIELD sales totaled $6.9 billion, an increase of 17% on a full year basis. Sales of our fixed-rate annuities were also a strong contributor to the overall annuity sales, totaling $2.7 billion. down from $3.7 billion in total fixed-rate annuity sales in 2022. As I mentioned, in 2023, we continue to strengthen our annuity and life insurance product portfolios. In May, we introduced new enhancements to our SHIELD-level annuities product suite as we continue to be a leader in the buffered annuity marketplace that we helped to create. In November, we launched Bright House Secure Key fixed-indexed annuities. expanding our distribution footprint in the fixed indexed annuity market. And we also expanded our life insurance suite with the launch of Bright House SmartGuard Plus, our first registered index-linked universal life insurance policy. Turning to expenses. We recognize that being a low-cost producer is a great way to a sustainable competitive advantage in this industry. Efficiency gains are what will allow us to consistently offer competitive products in the marketplace while also generating an appropriate return for shareholders. Our focus on controlling expenses was illustrated in 2023. With full-year corporate expenses up only 2%, to $885 million, that's a pre-tax number, in an environment with core inflation of approximately 4%. Finally, we continued to focus on maintaining the strength of our balance sheet. End of the year with an estimated combined risk-based capital or RBC ratio of approximately 420% and liquid assets at the holding company of $1.3 billion. The composition of the RBC ratio has changed, largely driven by the implementation of a new statutory requirement to reflect the effects of all anticipated future hedging on our variable annuity or VA reserves and required capital. The implementation of this new requirement had a favorable impact on our required capital with an offsetting increase in statutory reserves. So while our total combined adjusted capital, or TAC, declined to $6.3 billion as of year-end 2023, there was an insignificant impact to our RBC ratio. Ed will discuss our preliminary statutory results and the new statutory requirement in more detail in a moment. But I want to highlight that our overall risk management strategy remains unchanged, and we do not anticipate that this new statutory requirement will have a material impact on our long-term statutory free cash flows. Before turning the call over to Ed to discuss our fourth quarter financial results, I'd like to touch just for a moment on our priorities for 2024. First, we will continue to strengthen our product suite and leverage the depth and breadth of our expertise, along with our strong distribution relationships, to competitively position ourselves in the markets we choose to compete in. We believe that this combination will lead to continued growth in shield sales, an expanded presence in the fixed index annuity market, and the first dollar contributions into our work in partnership with BlackRock. We remain very excited about our expanded relationship with BlackRock to deliver BlackRock's LifePath paycheck. They are working with 14 plan sponsors at this point to implement this product offering. These 14 plan sponsors total $27 billion in target date fund assets, and include more than 500,000 individual employees. Initial plan sponsor funding is expected to occur this year. Second, we intend to continue to manage our expenses with the expectation that our corporate expenses will be down in 2024 versus 2023. Finally, balance sheet strength always remains a key priority and we believe that our strong rbc ratio and substantial holding company cash position will allow us to continue to return capital to shareholders i'm proud of all that we achieved in 2023 and look forward to 2024 as the bright house financial franchise continues to grow and evolve to a more diversified company. And with that, I'll turn the call over to Ed to discuss our fourth quarter financial results.