Corebridge Financial Inc.

Hello and welcome to the Corbridge Financial third quarter 2022 earnings call. My name is Lauren and I will be coordinating your call today. If you would like to ask a question during the presentation, you may do so by pressing star followed by one on your telephone keypad. I will now hand you over to your host, Josh Smith, Head of Investor Relations to begin. Josh, please go ahead.

Good morning, everyone, and welcome to Corbridge Financial's third quarter earnings update. Today's remarks may contain forward-looking statements which are subject to risks and uncertainties. These statements are not guarantees of future performance or events and are based upon management's current expectations. Corbidge's filings with the SEC provide details on important factors that may cause actual results or events to differ materially. Except as required by the applicable securities laws, Corbidge is under no obligation to update any forward-looking statements if circumstances or management's estimates or opinions should change. Additionally, Today's remarks may refer to non-GAAP financial measures. The reconciliation of such measures to the most comparable GAAP figures is included in our earnings release, financial supplement, and earnings presentation, all of which are available on our website at www.corbridgefinancial.com. With that, I would now like to turn the call over to our CEO, Kevin Hogan.

Good morning, and thank you for joining us for our first earnings call as Corbridge Financial. I am joined today by Elias Abayev, our Chief Financial Officer. Over the last two years, a great number of people from our own team, our parent company AIG, and our various partners worked diligently to position Corbridge Financial to become a successful standalone public company. This culminated with our September 15th listing on the New York Stock Exchange. I would like to start by thanking all of those that were involved for their contributions in reaching this milestone. During today's call, I will focus on our financial performance and current market conditions. reinforce our commitment to our stated financial targets, provide an update on recent strategic progress, and review our strong financial position. Elias will provide additional detail in our financial results, and then we will take questions. The third quarter was a very good quarter for CoreBridge Financial. I am both pleased with our results and confident in our future. We delivered solid sales in a dynamic market. We made significant progress on our core strategies. Our balance sheet remains strong and we are on pace to deliver an attractive return of capital to shareholders. Corbridge reported operating earnings per share of 57 cents for the third quarter with an adjusted return on average equity or adjusted ROAE of 6.8%. This reflects strong results from our core businesses in the face of a challenging macroeconomic environment that was felt across our industry. Recent market dynamics, such as the pullback in equity markets, increased interest rates and widened credit spreads, and resulting asset value reductions, affected each of our businesses to different degrees in the quarter. However, I want to emphasize that we expect that short-term market-related impacts should be more than offset over time by the long-term upside we experience from rising interest rates and the impact that has on driving sales and margin growth. The benefits from these conditions began to emerge last quarter, supporting strong new business generation and leading to an inflection point where historical year-over-year 8 to 16 basis points of base net investment spread compression finally turned from a headwind to a tailwind. We are now seeing spread expansion for the first time in years. Elias will provide more details on this important emerging development. Turning to the financial targets we disclosed as part of the IPO. We remain confident in achieving each of them as we maintain a strong balance sheet and deliver disciplined growth. We have a clear line of sight on achieving an adjusted ROAE of 12 to 14 percent and delivering a 60 to 65 percent payout ratio on adjusted after-tax operating income within 24 months from the IPO. We expect to deliver capital to our shareholders through a combination of $600 million in annual dividends along with share repurchases. We have committed to an annual dividend payable quarterly and have already paid our first and declared our second quarterly dividend. And we expect to have the financial flexibility to complement our dividend with additional return of capital to shareholders as early as the second quarter of 2023. Our ability to execute our capital management strategy is based on the strength of our balance sheet, the consistency of our insurance company cash flows, and the diversification in our businesses and earnings sources. During the third quarter, we also made significant progress on organic growth, investment partnerships, and efficiency strategies. As to organic growth, we delivered a strong quarter with robust sales and deposit flows. All four of our businesses delivered year-over-year growth in the quarter, and all four were supported by assets originated by Blackstone. Our multiple sources of earnings diversified product platform and network of distribution partners represent a strategic advantage. We are able to pursue profitable organic growth opportunities by focusing where risk-adjusted returns are the most attractive and customer needs the greatest under various market conditions. The third quarter once again demonstrated our ability to remain nimble and to pivot between spread-based and fee-based products as capital markets evolve driving more attractive opportunities for policyholders and for our business in our spread-based products, such as both our fixed and fixed-indexed annuities. Fixed-indexed annuity conditions were very appealing across our broad range of channels supported by our income and accumulation products. We set a company record for sales this quarter with deposits of over $1.7 billion, and we delivered positive net flows of $1.3 billion. The strong position and consistent performance of our fixed indexed annuity business, a core product for us in individual retirement, has yielded over $4 billion of positive net flows over the last 12 months. Fixed annuity conditions also remain attractive, where we continue to mobilize our strong position in bank distribution and we're further supported by Blackstone's ability to originate attractive assets leading to fixed annuity sales of approximately $1.3 billion for the third consecutive quarter. Overall, individual retirement delivered deposits of $3.8 billion for the quarter, reflecting 17% growth year over year and positive net flows of nearly $700 million over the three-month period. In group retirement, deposits were also strong at $2 billion, 11% higher than the prior year quarter, supported in part by new plan acquisitions and growth of out-of-plan deposits, in particular in fixed annuities. Turning to life insurance, while premiums and deposits were consistent year over year, they reflect an improving mix of business in the US and a continuing growth trend in the UK, where we remain optimistic about our international growth prospects. And lastly, in institutional markets, we had strong GIC issuance of $1 billion, originated $760 million of pension risk transfer transactions, and saw inflows to stable value wraps in the face of market uncertainty. We remain focused on full plan terminations in the US and UK. With attractive funding levels for many plans, our pension risk transfer pipeline remains robust. We also remain confident in our ability to become a more consistent issuer of GICs in the future. Our broad position across products and channels has been especially advantageous. as we have been able to respond effectively to rapidly changing market conditions and investor appetites. We are also making good progress in implementing our investment partnerships with both Blackstone and BlackRock. First, Blackstone continues to originate attractive assets across the duration spectrum at volumes that we could not previously achieve, supporting our product competitiveness and recent growth. The partnership is running well with Blackstone managing $50 billion of assets that we transferred at the end of 2021 and reinvesting proceeds from those assets. To date, Blackstone has originated approximately $5 billion of private and structured credit at an average gross yield of 6% and an average credit quality of BBB+. This new origination is part of the asset mix that has supported growth in our shorter dated annuities and is positioned to support our strong pipeline of pension risk transfer opportunities. With respect to BlackRock, we are well ahead of the original schedule to transfer our public liquid assets and some private securities representing $90 billion in amortized costs and 76 billion in market value. As of today, we have substantially completed these asset transfers. We are also in the project planning stages of the Aladdin platform which will further modernize our infrastructure and provide us with expanded analytics and accounting capabilities. In addition to modernizing our business, we are also driving towards a leaner operating model. Our expense reduction and productivity program, known as CoreBridge Forward, includes various initiatives such as leveraging our current outsourcing partnerships, refining our target operating model, modernizing our IT infrastructure, and rationalizing our real estate footprint. It is expected to generate approximately $400 million of savings on a run rate basis with a majority achieved within the next two years. We have already made meaningful progress and have achieved just over $100 million of run rate savings year to date ahead of the original plan to achieve the initial 100 million of savings by the end of the year. Elias will provide more information on our CoreBridge Forward program. Turning to the balance sheet, our capital, liquidity and leverage positions remain strong despite recent market conditions. Year to date, our insurance companies have distributed $2 billion of dividends and tax sharing payments tied to tax strategies. Our strong position gives us confidence that we are on the path to deliver on our stated financial commitments. We are excited about our current opportunities and what the future holds for CoreBridge. We are gaining momentum from some of the most attractive pricing conditions in recent memory, as well as strong tailwinds generated by the rising interest rate environment. We are well positioned to take advantage of these opportunities moving forward, while at the same time delivering on our capital commitments to shareholders. I will now turn the call over to Elias.