Equitable Holdings, Inc.

Good morning and welcome to Equitable Holding Third Quarter Earnings Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, your lines will be placed on bar one. Thank you. I would now like to turn the call over to Jessica Baer, Head of Investor Relations.

Thank you. Good morning and welcome to Equitable Holdings' third quarter 2020 earnings call. Materials for today's call can be found on our website at ir.equitableholdings.com. Before we begin, I would like to note that some of the information we present today is forward-looking and subject to certain SEC rules and regulations regarding disclosure. our results may materially differ from those expressed in or indicated by such forward-looking statements. So I'd like to refer you to the State Harbor language on slide two of our presentation for additional information. Joining me on today's call is Mark Pearson, President and Chief Executive Officer of Equitable Holdings, and Anders Malmstrom, our Chief Financial Officer. Also on the line is Ali Dibaj, Alliance Bernstein's Head of Finance and Strategy. 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. Reconciliations of these non-GAAP measures to the most directly comparable GAAP measures and related definitions may be found on the investor relations portion of our website in our earnings release, slide presentation, and financial supplement. I would now like to turn the call over to Mark and Anders for their prepared remarks.

Good morning and thank you all for joining us today. We are clearly living in interesting times with volatility and uncertainty unmatching anything we've seen in our 161 year history. However, with our prudent risk philosophy and the relationships and insights we have, I have no doubt Equitable will continue to protect and support our clients, deliver strong financial results, and be a positive force for good in the communities in which we live. I'd like to begin this morning by sharing highlights for my third quarter, which you can see on slide three. Overall, I am pleased to report third quarter non-GAAP operating earnings per share of $1.24 per share or $1.31 per share, excluding the impacts of the annual actuarial assumption update, up 5% year over year. Assets under management are up 6% year over year to $746 billion, supported by net flows. Our strong performance this quarter continues to demonstrate our ability to adapt and deliver stable earnings. While uncertainty persists, we have seen new business activity trending upwards this quarter, now at 80% of normal levels, demonstrating the resiliency of our business model and the strength of our distribution. Offsetting the new business has been an improvement in client retention and top-up business, such that net flows across the organization, including AB, remaining positive and continue to support AUM growth. In terms of our balance sheet, we continue our prudent approach with interest rate assumptions on our gap reserves at 2.25%, the lowest amongst our peers in the industry. At Q3, we show healthy statutory RBC ratios and $2.3 billion of surplus cash at holdings. We believe maintaining financial flexibility and balance sheet strength are critical during these times. To this end, last week we announced a landmark transaction to reinsure a portion of our legacy variable annuity block to Venable. As we shared last week, this transaction will reduce CTE98 tail risk by approximately 64% through the reinsurance of 13% of our enforced policies. This transaction validates our risk framework and unlocks $1.2 billion of statutory value and increases our RBC ratio by 60 percentage points. I think it is very important to understand that we were only able to transact with a credible partner like Venerable because of the work we've done in the last 10 years, including fund substitution, first-dollar dynamic hedging, volatility tools, and using our IPO to impose realistic reserve-setting assumptions, both in respect of policyholder behavior and interest rates. Without any of these, the positive $300 million CD commission we received would have been a very large payment the other way. Yes, there is a market for these books, But of course, smart money will look first to the adequacy of the reserves. We also announced the acceleration of $500 million of share repurchases in 2021, incremental to the 50% to 60% payout ratio target, which we continue to deliver on. Our focus remains on positioning our business for the future and enhancing long-term shareholder value as evidenced by the reinsurance transaction. Despite the fall in interest rates and the impact of the global pandemic, we remain on track to deliver on all guidance we gave at the time of the IPO in 2018. I'm pleased to announce that as a result of our strong expense focus, we achieved our 75 million productivity target ahead of schedule, and we expect incremental expense savings post 2020. Looking ahead, we will enter 2021 with good momentum and balance sheet strength to be further bolstered by the expected close of our legacy VA transaction in the second quarter. Meaningful expense savings and acceleration of shareholder returns. I will now pass it to Anders to give you some more detail, including our annual assumption update, segment results, capital management, and an update on our list profile. Anders?