Corebridge Financial (CRBG) Q3 2024 earnings summary

Executive summary

• Reported a net loss of $1.2 billion for Q3 2024, mainly due to realized losses from Fortitude Re funds withheld embedded derivative and unfavorable market risk benefits, partially offset by higher net investment income.

• Adjusted pre-tax operating income rose to $1.0 billion, up 27% year-over-year, driven by higher net investment income and lower general operating expenses.

• Operating EPS increased 31% year-over-year to $1.38, with adjusted ROAE up to 14.7%.

• Premiums and deposits rose 5% year-over-year to $9.6 billion, with strong growth in fixed annuity deposits.

• Returned $848 million to shareholders through dividends and share repurchases, with a year-to-date payout ratio of 83%.

Financial highlights

• Total revenues for Q3 2024 were $2.6 billion, down from $5.5 billion in Q3 2023, reflecting higher net realized losses and lower premiums.

• Net investment income increased to $3.3 billion in Q3 2024, up 24% year-over-year, driven by higher base portfolio income and income from Fortitude Re funds withheld assets.

• Aggregate core sources of income increased 4% year-over-year, with fee income up 11% and underwriting margin up 4%.

• Adjusted pre-tax operating income (APTOI) was $1.0 billion, up 14% excluding variable investment income and notable items.

• Adjusted book value per common share was $37.32 at September 30, 2024.

Outlook and guidance

• Management expects continued volatility in net income due to Fortitude Re reinsurance accounting, but minimal impact to comprehensive income.

• Higher interest rates are expected to benefit spread income and new business sales, but may also increase surrenders and hedging costs.

• Ongoing focus on expense reduction and operational efficiency through the Corebridge Forward initiative, targeting $400 million in annual run-rate savings.

• Targeting mid-single digit plus balance sheet growth and increased cash generation over the long term.

• Continued focus on product innovation, expense efficiencies, and capital management to drive EPS and shareholder returns.