Brighthouse Financial (BHF) Q3 2024 earnings summary

Executive summary

• Net income available to shareholders was $150 million for Q3 2024, down from $453 million in Q3 2023, reflecting market-driven volatility.

• Adjusted earnings were $767 million, including $524 million of net favorable notable items from actuarial review and assumption changes.

• Statutory combined total adjusted capital was $5.7 billion at September 30, with holding company liquid assets of $1.3 billion.

• Pending reinsurance agreement for a legacy block of fixed and payout annuities is expected to close imminently, with all necessary approvals received and projected to restore the RBC ratio to the 400%-450% target range.

• $215 million of common stock repurchased year-to-date through November 1, 2024, reducing shares outstanding by over 50% since 2018.

Financial highlights

• Adjusted earnings, less notable items, were $243 million for Q3 2024, down from $346 million in Q2 2024 and $275 million in Q3 2023.

• Net investment income was $1.29 billion, with an adjusted net investment income yield of 4.26%.

• Statutory combined total adjusted capital (TAC) was $5.7 billion at September 30, up $300 million from the prior quarter.

• Estimated combined RBC ratio at quarter-end was between 365% and 385%; pro forma for the reinsurance deal, it would be at the low end of the 400%-450% target range.

• Year-to-date annuity sales were $7.8 billion, flat year-over-year; life insurance sales were $87 million, up 19% year-over-year.

Outlook and guidance

• A reinsurance transaction is expected to close by year-end, projected to bring the pro forma RBC ratio to the low end of the 400%-450% target range under normal market conditions.

• Management expects full-year 2024 corporate expenses to be lower than 2023, despite typical Q4 seasonality.

• Anticipate further growth in annuities and life insurance sales.

• Flow reinsurance and hedging strategy changes expected to reduce new business strain and improve RBC ratio in 2025.

• Long-term statutory free cash flow disclosures planned for next year, with expectations of a ramp-up as the legacy VA block runs off.