F&G Annuities & Life (FG) Q1 2025 earnings summary

Executive summary

• Q1 2025 results were impacted by temporary headwinds, including market volatility, lower MIGA/MYGA sales, and unfavorable mark-to-market effects, but core businesses like fixed index annuity and pension risk transfer remained strong.

• Adjusted net earnings were $91 million ($0.72/share), down from $108 million ($0.86/share) in Q1 2024, reflecting margin compression, lower owned distribution margin, and higher interest expense, partially offset by asset growth and disciplined expense management.

• Achieved record assets under management (AUM) before flow reinsurance of $67.4 billion as of March 31, 2025, up 16% year-over-year, driven by strong indexed annuity sales.

• Completed a public offering of 8 million shares, raising $269 million for general corporate purposes and organic growth support.

• Management remains confident in the business model's resilience and expects improvement in key drivers throughout 2025, progressing toward medium-term Investor Day targets.

Financial highlights

• Gross sales were $2.9 billion, down 17% year-over-year due to lower MIGA/MYGA sales; excluding MIGA/MYGA, gross sales rose 5%.

• Net sales were $2.2 billion, down 4% year-over-year.

• Book value per share (excluding AOCI) was $43.31, up 5% year-over-year.

• Adjusted ROA was 0.68% for Q1 2025, with last 12-month adjusted ROA at 1.00%; adjusted ROE (ex-AOCI) was 9.7%, up 2.3% year-over-year.

• Operating expense ratio to AUM improved to 58 bps from 63 bps a year ago.

Outlook and guidance

• Management expects improvement in headwinds throughout 2025 and remains committed to achieving Investor Day targets, including 50% AUM growth, adjusted ROA ex significant items of 1.33%-1.55%, and adjusted ROE ex AOCI of 13-14%.

• Anticipates continued growth in fixed index annuity, RILA, and pension risk transfer businesses, with MIGA/MYGA sales expected to remain opportunistic and volatile.

• Focused on disciplined expense management, capital allocation, and organic growth, with ongoing investments in the operating platform.