F&G Annuities & Life, Inc.

Good morning and welcome to FNG's second quarter 2025 earnings call. During today's presentations, all callers will be placed in listen-only mode. Following management's prepared remarks, the conference will be open for questions with instructions to follow at that time. I would now like to turn the call over to Lisa Foxworthy Parker, SVP, Investor in External Relations. Please go ahead.

Thanks, operator, and welcome, everyone. I'm joined today by Chris Blunt, Chief Executive Officer, and Connor Murphy, President and Chief Financial Officer. Today's earnings call may include forward-looking statements and projections under the Private Securities Litigation Reform Act, which do not guarantee future events or performance. We do not undertake any duty to revise or update such statements to reflect new information, subsequent events, or changes in strategy. Please refer to our most recent quarterly and annual reports and other SEC filings for details and important factors that could cause actual results to differ materially from those expressed or implied. This morning's discussion also includes non-GAP measures, which management believes are relevant in assessing the financial performance of the business. Non-GAP measures have been reconciled to GAAP where required and in accordance with SEC rules within our earnings materials available on the company's investor website. Please note that today's call is being recorded and will be available for webcast replay. And with that, I'll hand the call over to Chris Blunt.

Good morning, everyone, and thanks for joining our call. We delivered strong second-quarter results with record AUM before flow reinsurance and one of our best sales quarters in history. As we announced yesterday, I'm excited about the launch of our new reinsurance vehicle in partnership with Blackstone Managed Fund. This sidecar will provide long-term, on-demand capital to support our growth and move F&G further toward a more fee-based, higher margin, and less capital-intensive business model. The reinsurance sidecar went into effect last Friday, August 1st, with approximately $1 billion in anticipated capital commitments. This will augment our existing flow reinsurance agreements and is expected to contribute to higher ROE over time. Connor will provide more details of the transaction later on this call. Turning to our results for the quarter, the total annuity market has expanded in recent years as consumers and financial advisors recognize the value of annuities for retirement security. Through the first half of 2025, the industry has benefited from continued strong consumer demand, as well as favorable demographics and macro conditions for annuity sales. Demographic trends remain a strong secular driver as the aging population seeks guaranteed lifetime income streams. And the continued macroeconomic volatility increases the relative attractiveness of fixed annuity products for consumers that want guaranteed tax-support growth and principal protection. Against this backdrop, F&G's sales engine regained momentum in the second quarter, and we delivered one of our best sales quarters in history with $4.1 billion of gross sales. Our all-time record of $4.4 billion was in the second quarter of 2024, which included $900 million of funding agreements relative to no funding agreements in the current quarter. We had significant growth in our core sales of fixed index annuities, index life, and pension risk transfer. Together, these core product sales were $2.2 billion, up 22% over the sequential first quarter, and up 10% over the second quarter of 2024. Highlights for our core sales included $1.6 billion of index annuity sales that were higher than the second quarter of 2024. FIA continues to be our largest contributor to index annuity sales while RILA continues to gain traction. A record $53 million of IUL sales, up 20% of the second quarter of 2024, is our life insurance solution as we're meeting the needs of the underserved multicultural middle market. And more than $400 million of pension risk transfer sales compared with approximately $300 million in the second quarter of 2024. This brings PRT sales to $700 million for the first half of the year. MAGA sales were a record $1.9 billion in the second quarter, and we had no funding agreements. Two products we view as opportunistic. This was a 73% increase over the sequential quarter due to higher MAGA sales, although down 21% for the second quarter of 2024 due to no funding agreements in the current quarter. The economics for flow reinsurance were favorable early in the quarter, and almost half of the second quarter MAGA sales were generated in the month of April. MAGA sales increased 27% over the second quarter of 2024. As a reminder, opportunistic sales volumes will fluctuate quarter to quarter depending on economics and market opportunity. Notably, retail channel sales were a record with more than $3.6 billion in the second quarter, reflecting one of our best quarters for index annuities and a record quarter for both IUL and MAGA. For the first half of the year, we have generated $7 billion of gross sales, comprised of $4 billion of core sales and $3 billion of opportunistic market sales. Net sales retained were $4.9 billion in the first half of the year. Looking ahead to the remainder of 2025, we will continue to prioritize pricing discipline and allocating capital to the highest return opportunities. With the launch of our reinsurance sidecar during the third quarter, the economics for FIA sales are becoming relatively more attractive, and we expect our mix of sales to shift more to FIA in the back half of the year. We also have the flexibility to optimize our level of flow reinsurance in line with our capital targets by dynamically adjusting MAGA volumes up and down as market economics change, as demonstrated in the first half of the year. F&G reported record AUM before flow reinsurance of $69.2 billion, the end of the second quarter, including retained assets under management of $55.6 billion. Compared to the second quarter of 2024, AUM increased 13 and 7 percent, respectively, driven by net new business flows. Next, turning to the investment portfolio. The retained portfolio is high quality, with 97 percent fixed maturities being investment grade. Credit-related impairments have remained low and stable, averaging six basis points over the last five years. Through the first half of the year, credit-related impairments remain below our pricing. During the second quarter, we made significant progress with deploying our excess cash. As a result, our fixed income yield increased five basis points from the first quarter, and we believe there is still more opportunity for uplift in the spread environment becomes more attractive. In summary, F&G is uniquely positioned in the industry with a profitable and growing $54 billion in force block. We generate spread-based earnings from fixed annuities and pension risk transfer, and we have multiple sources of fee-based earnings with the sidecar in place, alongside our flow reinsurance, middle market life insurance, and well-performing own distribution portfolio. As our business grows, we're becoming a more fee-based, higher margin and capital-light business, leveraging our position as one of the industry's largest distributors of annuities and life insurance. Before turning the call to Connor, I'd like to highlight the executive management transition that we announced last evening. First, John Currier has decided to retire next year and will be transitioning from his role as F&G's president into a senior advisory role. John has been an invaluable partner and his deep industry expertise and leadership has been instrumental to our transformation and expansion over the last 10 years. Under John's leadership, we have focused our efforts in the retail space on our mission, helping more and more people achieve their aspirations by expanding our retail footprint in breadth and depth, driving exceptional sales growth, and we've more than doubled our assets under management over the last five years. We are now a market leader in several segments, and I am appreciative to John for all of his efforts and on a personal level, his friendship. I look forward to continuing to work with John in his new capacity as a senior advisor until his retirement next year. We also announced that Connor will be taking on the role of president of F&G in addition to his current role as CFO. Connor has made a big impact since joining F&G, and I'm looking forward to working with him in this new capacity. Connor brings a wealth of experience developed through a variety of executive roles at leading insurance companies in both the U.S. and abroad. This experience will be invaluable as we continue to grow the company, as well as expand our capital light, fee-generating businesses, which I firmly believe will grow the value of F&G. Let me now turn the call over to Connor to provide further details on F&G's quarter financial highlights.