Corebridge Financial Inc.

Good morning. Thank you for attending today's CoreBridge Financial second quarter 2024 earnings call. My name is Jennifer and I'll be your moderator today. All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end. If you would like to ask a question, press star 1 on your telephone keypad. I would now like to pass the conference over to Ishul Muderasola with CoreBridge Financial. Ishul, please proceed.

Good morning, everyone, and welcome to the Corbridge Financial Earnings Update for the second quarter of 2024. Joining me on the call are Kevin Hogan, President and Chief Executive Officer, and Elias Habeib, 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. Corbidge'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, Corbidge is under no obligation to update any forward-looking statements if circumstances or management's estimates or opinions should change, and you are cautioned to not place undue reliance on any forward-looking statements. 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 turn the call over to Kevin and Elias for their prepared remarks. Kevin?

Thank you, Ishul, and good morning, everyone. I am pleased to report strong operating results for the second quarter, once again demonstrating the CoreBridge financial value proposition. Our diversified business model, strong balance sheet, and disciplined execution continue to create shareholder value as demonstrated by the growth in our earnings and cash generation. Through the quarter, our four market-leading businesses capitalized on attractive market conditions and strong customer demand to drive growth and create value. Turning to slide three, Corbridge reported operating earnings per share of $1.13, a 9% increase year over year. Our run rate operating EPS, which adjusts alternative investment returns to our long-term expectations, grew 12% over the same period. Our collective businesses generated $11.7 billion of premiums and deposits, a 17% increase year over year. This is the highest in over a decade for CoreBridge, reflecting strong customer demand and the benefit of our broad suite of products and services. CoreBridge also delivered 5% growth in aggregate core sources of income. All three sources, base spread income, fee income and underwriting margin, each increased, reflecting our ability to deploy resources where customer demand is the greatest and risk-adjusted returns are the most attractive. Our strong balance sheet gives us the flexibility to both invest in our businesses and return capital to shareholders. We proactively manage both sides of the balance sheet to maintain a sound capital and liquidity profile. We are committed to returning capital to shareholders, and in the quarter, we returned $575 million through a combination of dividends and share repurchases. Since the IPO, we have consistently demonstrated our ability to support robust sales while delivering attractive returns to our shareholders and maintaining balance sheet metrics in line with our targets. We are also continuing to improve our operating leverage. General operating expenses are lower by 6% year over year after adjusting for the international life divestitures. This reduction, which is driven by the benefits of CoreBridge Forward, our expense and modernization program, has been achieved during a time of record growth for the company. Expense management will continue to be a contributor to financial performance. as we developed important capabilities through the execution of CoreBridge Forward. We expect to leverage these skills beyond this program and have shifted to a focus on continuous improvement to further enhance operating efficiency. Additionally, I am pleased to share that we began ceding premiums to our affiliated Bermuda reinsurer in July, having received all the required approvals. CoreBridge is firing on all cylinders and executing on the plans necessary to deliver on the commitments that we made at the time of the IPO. This includes generating a reported ROAE of 12% for the first half of 2024, achieving the lower end of our target. Moving to slide four. CoreBridge is dedicated to helping individuals take action to plan, save for, and achieve secure financial futures. Through this purpose, Our four market-leading businesses drive long-term growth and value creation. Our addressable markets are significant, and each benefit from strong tailwinds, given a large and growing retirement-aged U.S. population, the life insurance protection gap, and growing need for retirement solutions. In the second quarter, individual retirement enjoyed strong demand for its products, in particular fixed and fixed-index annuities. We have long been a leading participant in these markets, offering a broad range of income and accumulation-oriented solutions through our extensive distribution platform. We continued to enjoy strong growth in the bank channel but also saw significant growth in our broker-dealer channel, reflecting the success of our strategy to support the unique needs of each major distribution partner. Individual retirement produced quarterly sales of $6.8 billion, up 68% year over year, led by our fixed annuity products. Fixed annuity sales were $4.1 billion, significantly higher than any quarter in recent history. Concurrently, we saw the fixed annuity surrender rate decline to the lowest level in five quarters. The combination of these two trends contributed to general account net flows in the quarter of $3 billion. Year to date, individual retirement general account net flows of $3.6 billion have already exceeded all of the individual retirement general account net flows produced in 2023. Touching briefly on our other businesses. In group retirement, we continue to expand our range of offerings to serve the growing demand for in-plan and out-of-plan solutions. We are optimistic about the potential for our out-of-plan business, which reflects the increasing need for advice in response to the aging of the population at a time of unprecedented generational wealth transfer. Capitalizing on this opportunity, we once again increased out-of-plan sales, which now comprise 37% of total premiums and deposits, and expanded advisory and brokerage assets under administration by 12%. In life insurance, recently we have been outpacing the market, and in the second quarter, we delivered sales growth of 13% over the prior year. This reflects in part the success of our automated and accelerated underwriting practices. Also, last month we announced the name change of our longstanding direct-to-consumer life insurance business to CoreBridge Direct. We are proud to have put the CoreBridge name on this business. In institutional markets, starting with GICs, conditions were favorable in the quarter, and so we issued $1.8 billion, demonstrating our strategy of being a more regular issuer following the IPO. Additionally, we continued to work through an attractive pipeline of potential pension risk transfer opportunities. Moving to slide five. Across Corbridge, execution continues to be a priority, and I am happy to announce that we received approvals from our regulators during the second quarter to begin to see new business to our Bermuda entity. Bermuda provides access to an attractive regulatory capital framework that is aligned with how we approach balance sheet management. Utilizing our Bermuda-based entity presents opportunities for us to leverage our new business origination capabilities more effectively and deploy capital more efficiently, both creating value for shareholders. In July, we initiated our first flow reinsurance facility, focusing on fixed and fixed index annuities written through our individual retirement business. Our Bermuda-based entity is one means of optimizing capital efficiency and we continue to explore others. Corbidge has achieved much over the first half of 2024, and we believe our strategy continues to drive an attractive return profile. Our diversified business model, strong balance sheet, and disciplined execution enable our insurance companies to generate significant cash flows. Year to date, our insurance subsidiaries distributed $1.1 billion to the holding company, and CorBridge has returned $961 million to shareholders. This has resulted in a payout ratio of 70% and we remain firmly on track to meet our full year target. Our financial position is strong and our results reflect the earnings power of our franchise. With positive momentum across our businesses, we are well positioned to further grow earnings and cash flows while maintaining our financial flexibility. We will continue to execute on our strategy and optimize our capital to strengthen our franchise and generate long-term growth in shareholder value. We are pleased with the results we have achieved to date and remain excited about the opportunities for the future. We look forward to welcoming Nippon Life as a shareholder following regulatory approval. To our colleagues at CoreBridge, Thank you for your commitment and professionalism. I am so proud of what you have accomplished and your ability to consistently execute. I will now turn the call over to Elias.