Corebridge Financial Inc.

Hello everyone and welcome to the Corbridge Financial Inc third quarter 2024 earnings call. My name is Charlie and I'll be coordinating the call today. You will 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. If all questioners could please mute locally once they've asked their question to reduce the risk of background noise, that would be greatly appreciated. I'll now hand over to our host Ishil Muduasulu, Head of Investor and Rating Agency Relations to begin. issue, please go ahead.

Good morning, everyone, and welcome to core bridge financials earnings update for the third quarter of 2024. Joining me on the call or Kevin Hogan, President and Chief Executive Officer and Elias have a 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. Corbridge'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, Corbridge 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 now turn the call over to Kevin and Elias for their prepared remarks. Kevin?

Thank you, Ishul, and good morning, everyone. Today, I will review our results for the third quarter and detail how CoreBridge Financial once again delivered on our value proposition. Through our diversified business model, strong balance sheet, and focused execution, we continued to create shareholder value demonstrated by growth in earnings and cash generation and return of significant capital to shareholders. Moving to slide three, Corbridge had a very strong quarter as we grew operating earnings per share to $1.38, a 31% increase year over year. Additionally, our run rate EPS increased 13% over the same period. With solid fundamentals across our diversified businesses, our core sources of income grew 4% year over year, and 5% sequentially. Each of our sources of income, fee spread and underwriting, increased year over year. We achieved these attractive business results while also maintaining a strong balance sheet, one supported by high quality assets and liabilities, prudent risk management, and diversification. We are heavily focused on asset liability management, which is embedded across all facets of CoreBridge. Our asset strategy is driven by our liability profile and our broad product portfolio reflects a long tradition of thoughtful product design and dynamic product management. Reflecting our risk management focus, CoreBridge had no significant reserve adjustments as part of our 2024 annual actuarial assumption update. Built on our strong foundation, CoreBridge continues to create shareholder value through disciplined execution. Total capital return to shareholders for the third quarter was $848 million, including part of the proceeds from the sale of our UK life insurance business. Moving to slide four. Our market leading businesses continue to serve customers' needs and support our distribution partners' strategies. Our addressable markets are significant and each benefit from strong tailwinds given a large and growing retirement aged US population and a life insurance protection gap. The macroeconomic environment also continues to be supportive of our business. Interest rates at mid-durations are expected to remain at attractive levels and new money rates were in excess of 6%. As Elias will expand upon, there may be some short-term impacts from lower rates at the short end of the yield curve, but these will be more than offset by growth in the overall portfolio over time. A steeper curve is generally better for our business. Now turning to the businesses. In individual retirement, premiums and deposits increased 40% year over year to $5.5 billion. General account net flows supported by strong sales volume and improving surrenders were nearly $1.7 billion for the quarter and $5.3 billion for the year to date, a level that already exceeds what we reached for full year 2023. These strong flows in the general account continue to serve as a platform to drive current and future earnings. Last month, individual retirement expanded on what is already one of the broadest annuity platforms in the industry with the launch of our first registered index-linked annuity, or RILA. As part of the product development process, we leverage the long standing relationships we have with distribution partners and our deep understanding of their strategies. Our Ryla brings together the most sought after features already in the market, together with a lock strategy that is exclusive to CoreBridge. The product is already resonating with our partners and we are pleased with the reception to date. Financial professionals at nearly 200 of our top distribution partners were positioned to sell our Ryla from day one, making it our largest new product launch ever. CorBridge now stands as the only top three annuity provider with an offering in every major product category. Group retirement produced another solid quarter. Excluding plan acquisitions, premiums and deposits grew 10% year over year. advisory and brokerage assets under administration increased 22%, and out-of-plan proprietary annuity premiums and deposits increased 17%. The long-term growth opportunity for advisory, brokerage, and out-of-plan annuities is significant as 1.6 million of our customers are in-plan only. Both in-plan and out-of-plan Our experienced team of financial professionals are an essential part of our success, and we have been investing to further improve their efficiency, resulting in an increase in average productivity per advisor of 15% year over year. Life insurance, an important part of our diversified portfolio, had a very strong quarter. Sales growth was 14% year over year, which continues to outpace the industry as it has for eight consecutive quarters. Our modern approach to new business is a key reason for this success. With our data-driven practices, 80% of newly issued policies are auto-decisioned. Building off this capability, we have developed a digital policy application process called Simply Now that provides a contemporary purchasing experience with the underwriting decision typically delivered in a matter of minutes. This feature is attractive to many financial professionals, facilitating further expansion of our life insurance distribution platform. Institutional markets also had a strong quarter. Reserves increased 20% year over year, supporting ongoing earnings growth, and we issued $1 billion of DICs this quarter, furthering our strategy to become a more regular issuer. With pension risk transfer, We see a robust pipeline of large potential transactions for the remainder of this year and going into 2025. As a reminder, we specialize in complex transactions that take time to develop and are not consistent quarter to quarter. Turning to slide five, you will see the four strategic levers that CoreBridge is focused on to grow earnings per share and cash flows. The first is organic growth. I just spent a few minutes talking about our strong business fundamentals and the opportunities ahead. We believe CoreBridge will continue to grow our balance sheet organically, which will in turn contribute to increase earnings per share over time. The second strategic lever is balance sheet optimization. We will continue to pursue opportunities to actively manage both our assets and liabilities to drive higher return on capital. To this end, we are expanding our Bermuda strategy and continue to explore additional opportunities to enhance our financial flexibility. The third is expense efficiency. We successfully delivered on core bridge forward the first phase of our modernization and expense efficiency program. As of September 30 approximately $320 million in savings have earned in from this program. and we expect the final $80 million to earn in through 2025. CoreBridge is moving to the next phase of modernization. We are further digitizing end-to-end processes that support our insurance operations to improve the customer journey and the distribution partner experience. We are also building on the significant investments we made as part of our separation process to further modernize our finance and actuarial capabilities. We are committed to delivering improved performance and enhanced operational efficiency over time. The fourth lever is capital management. Corbridge remains focused on effectively managing capital to drive increased shareholder returns, executing on opportunities with the goal to provide an attractive and growing cash return to shareholders. Next, I want to spend a moment to update you on the progress we are making against some of our key financial goals. First, adjusted return on average equity. Year to date, we have delivered a run rate ROE of 13.3%, a 130 basis point improvement year over year, and well within our 12 to 14% target range. Third quarter ROE represents a 315 basis point increase since the IPO. Second, operating earnings per share. Year to date, we have delivered run rate EPS of $3.70, a 13% improvement year over year. Discrete third quarter EPS represents a 36% improvement since the IPO. And third, capital return. CorBridge has returned $1.8 billion to shareholders over the first nine months of the year, and we are on target to achieve a payout ratio of 60 to 65% for the year excluding proceeds from the sale of our UK life insurance business. Since the IPO, Corbridge has returned $4.3 billion of capital to shareholders, including over $1 billion from our international life divestitures. Corbridge has consistently demonstrated the discipline to allocate capital to growth opportunities where risk-adjusted returns are the most attractive and where customer needs are the greatest, while also delivering significant returns to shareholders and maintaining a strong financial position. Looking forward, we are focused on growing earnings per share and cash flows and continuing to increase long-term shareholder value. I will now turn the call over to Elias.