Corebridge Financial Inc.

Hello everyone and welcome to the Corbridge Financial 3rd Quarter 2023 Earnings Call. My name is Charlie and I'll be coordinating the call today. You'll have the opportunity to ask a question at the end of the presentation. If you'd like to register a question, please press star followed by one on your telephone keypads. I will now hand over to our host, Ishil Mudurusolu to begin. Ishil, please go ahead.

Good morning, everyone, and welcome to Corbridge Financial's earnings update for the third quarter of 2023. Joining me on the call are Kevin Hogan, President and Chief Executive Officer, and Elias Habaez, Chief Financial Officer. We will begin with prepared remarks by Kevin and Elias, and then we will take your questions. Today's comments 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 and assumptions. CoreBridge's filings with the SEC provide details on important factors that may cause actual results or events to differ materially from those expressed or implied by such forward-looking statements. Except as required by the applicable securities laws, CoreBridge 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 investors.corbridgefinancial.com. With that, I would like to now turn the call over to Kevin and Elias for their prepared remarks. Kevin?

Thank you, Ashil, and hello, everyone. This morning, we present our third quarter 2023 results. We delivered another strong quarter and executed with focus and precision across our strategic and operational priorities. Before reviewing our performance for the last three months, I want to share with you the outstanding progress we have made over the last year. On September 15, 2022, CorBridge had its initial public offering and was listed on the New York Stock Exchange. Since then, our first year as a public company has been a very successful one. Allow me a moment to offer my gratitude to everyone involved. Thank you to our many partners across the industry. Thank you to our customers and clients. And of course, thank you to our employees. I am so very proud of our people for their dedication to our company and customers and for their commitment, focus, and professionalism. And lastly, much appreciation to our parent company, AIG. It has been an extraordinary 12 months. We are experiencing one of the best markets for life insurers in recent memory, with interest rates at levels not seen in well over a decade, supporting our ability to manufacture products that are very attractive to our customers. We are making the most of these favorable conditions, notably delivering healthy organic growth in our spread-based products, and we have a constructive outlook for all of our businesses. Our ability to capitalize on this moment speaks to a broader theme about CoreBridge. We are, at our core, a fundamentally nimble company. Our strong balance sheet, our broad and well-designed product suite, and our long-standing distribution relationships allow us to execute swiftly and position us to perform across a variety of market environments ultimately benefiting both customers and shareholders. The advantages of our nimble approach are clear in our results. Premiums and deposits have grown by 28% this year, and base spread income has grown by 34% over the same period. The earnings power of our core insurance businesses is improving, aided by tailwinds from interest rates and credit spreads. Another hallmark for CoreBridge during our first year has been our focused execution. This, combined with the strength of our business, have produced some exceptional accomplishments and continue to drive shareholder value. One important outcome of our focused execution has been our robust return of capital to shareholders. We have returned $1.4 billion to corporate shareholders since the IPO through a combination of dividends and share repurchases. This includes over $1.1 billion of dividends and $246 million of share repurchases. And yesterday, we declared our sixth consecutive quarterly dividend of 23 cents per share. In the third quarter, we achieved another significant milestone in our capital management program. We began open market buybacks, taking advantage of market conditions, and as of October 31st, we have repurchased approximately $102 million of CoreBridge stock. In another important accomplishment for our company, we continue to streamline our business portfolio through the sale of our international operations. This strategic initiative will allow us to focus on life and retirement products and solutions in the United States, the world's largest market, as well as unlock significant value for shareholders. Earlier this week, we announced that we closed the sale to AXA of Leah Healthcare, the second largest private health insurance provider in Ireland. We also declared a special dividend in the amount of approximately $730 million to be paid in November as we look to distribute proceeds from this sale. And we recently announced the sale of our UK life insurance business to Aviva for 460 million pounds, which is expected to close in the first half of 2024, subject to regulatory approvals. This transaction is highly accretive and will have a negligible impact on future earnings. As noted yesterday on AIG's earnings call, we expect proceeds from this transaction largely will be used for share repurchases subject to market conditions. Together, the sale of these two businesses unlocks over $1.2 billion of value, enabling CoreBridge to deliver additional significant return of capital to shareholders. moving on to other areas of accomplishment over the past year. We have achieved or contracted on 81% of our exit run rate savings goal of $400 million from CoreBridge Forward, our modernization program that is delivering both expense reduction and increased efficiency. We remain confident this program will be completed on time. We also continue to achieve consistent progress with CoreBridge's operational separation from AIG, having exited 69% of the transition services agreements that were put in place at the time of our IPO. We now expect our cost to achieve will come in at the higher end of our range of $350 million to $450 million. And to date, we have incurred $366 million of the cost to complete our separation. Another area of achievement over the last 12 months has been the expansion of our strategic investment partnerships. These investment partnerships benefit CoreBridge as well as our customers. By leveraging our relationship with Blackstone, we have increased our access to unique and attractive assets, enhancing the competitiveness of our products and our long-term growth profile. Since day one, Blackstone has been investing in assets with very attractive risk-adjusted returns, generating an average yield of 6.6% and an average credit quality of single A plus. This investment activity has supported growth across all four of our business segments. With respect to BlackRock, we have fully integrated them in our day-to-day portfolio management, and we continue to make strides with our migration to their Aladdin platform, which will further modernize our infrastructure and provide us with expanded analytics and accounting capabilities. In total, with all of these accomplishments since the IPO, it has been a very successful first year for CoreBridge. What's more is that our focused execution combined with our stable high quality business mix are contributing to steady improvements in our key financial metrics. As an example, our run rate return on average equity for the first nine months of 2023 was 12% in improvement of 190 basis points since our IPO. We remain on a firm trajectory to achieve a 12 to 14% ROAE in 2024, one of the key financial targets we laid out when we launched CoreBridge. Pivoting to the third quarter, we delivered another strong financial performance over the last three months, extending the positive momentum that we have been building since the IPO. Elias will provide more detail during his remarks, but I will briefly touch on four important highlights. we have been able to grow our non-GAAP operating earnings per share by 28% and our adjusted return on average equity by 230 basis points, both on a year-over-year basis. This strong performance reflects the scale and depth of our spread-based business and our ability to operate across product lines to pursue profitable organic growth where the risk-adjusted returns are the greatest. Second, Our earnings this quarter benefited from a slight net favorable impact arising from our annual assumption review. We had no significant reserve adjustments, an important detail that validates our sound governance and reserving framework, as well as demonstrates the ongoing stability of our balance sheet. Third, our diversified businesses grew aggregate core sources of income by 11% year over year, benefiting from the cumulative effect of strong organic growth and improving base spread income. And fourth, we delivered $9.1 billion of premiums and deposits this quarter, reflecting strong customer demand for our spread-based products and the ongoing expansion of our business. Although we did not execute any significant pension risk transfer transactions during the quarter, the pipeline remains robust. Our consistent organic growth is supported by the strength of our leading distribution platform as well as our diverse suite of products that are attractive to customers and deliver strong return profiles. I began my remarks with a brief reflection on our performance since our initial public offering, and this is where I would like to end. I am proud of all that we have accomplished over the last year, and I am confident CoreBridge will continue to generate shareholder value through focused execution, a strong balance sheet in our diverse and attractive businesses. I will now turn the call over to Elias to walk you through our third quarter results in more detail.