Brighthouse Financial, Inc. · NASDAQ:BHF
Brighthouse Financial — Corporate Update (March 2018)
9 slides from Brighthouse Financial's corporate update, Mar 16, 2018
Slide 1: Brighthouse Financial, Inc. Sensitivity Update March 2018
Brighthouse Financial, Inc. Sensitivity Update March 2018
Slide 2: Note regarding forward-looking statements
Note regarding forward-looking statements This presentation and other written or oral statements that we make from time to time may contain information that includes or is based upon forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-l
Slide 3: Executive summary
Executive summary • Improved variable annuity (VA) cash flow profile driven by lower hedge costs • Lower variability of cash flows across the five VA scenarios • Protecting statutory balance sheet for VA & Universal Life with Secondary Guarantees (ULSG) exposures with manageable GAAP impact 3
Slide 4: Principal updates from Form 10
Principal updates from Form 10 • Incorporates full migration to Brighthouse Financial hedging strategies, including Shield Annuities as a VA CTE951 risk offset • Benefits to hedge gain/loss from VA tax strategy refinement, effective with tax elections made as of year-end 2017 • Includes 2017 actuari
Slide 5: Meaningful improvement in VA statutory distributable cash flow
Meaningful improvement in VA statutory distributable cash flow ($ in billions) Lower hedge gains/losses driven by: • Successful transition to the Brighthouse Financial VA hedging strategy • Benefits from tax elections made as of year-end 2017 Assets above CTE95 in Base Case and Scenarios 2-4 at $3B
Slide 6: VA in-force lifetime present value of cash flows
VA in-force lifetime present value of cash flows Scenario Assumptions PV of Cash Flows as of Year End 20161 ($ billions) PV of Cash Flows as of Year End 20171 ($ billions) 9.8 Separate Account Returns: 6.5%2 Interest Rate Yields: mean reversion of 10 Year UST to 4.25% over 10 years Base Case Scenari
Slide 7: Reduced market sensitivity on VA assets above CTE95
Reduced market sensitivity on VA assets above CTE95 • Improved risk profile • Limit downside of assets above CTE95 up to $1B for instantaneous shocks • Includes Shield Annuities as a VA CTE95 risk offset • Does not reflect impact of passage of time on CTE95 (aging); ~$200M per quarter • Assumes impl
Slide 8: Mitigated downside interest rate risk for run-off ULSG block, retained potential for upside
Mitigated downside interest rate risk for run-off ULSG block, retained potential for upside Source: Brighthouse Financial Form 10 published June 2017 and 2017 10-K. Run-off ULSG assets vs. target – statutory basis ($B) 0.1 (0.1) 0.0 0.5 1.3 0.0 (0.1) 0.0 0.5 1.5 (0.2) 0.0 0.2 0.4 0.6 0.8 1.0 1.2 1.4
Slide 9: GAAP net income market sensitivity
GAAP net income market sensitivity Source: Brighthouse Financial Form 10 published June 2017 and 2017 10-K. 1With respect to GAAP, ULSG policy reserves are relatively insensitive to interest rate movements. As a result, the sensitivity of ULSG GAAP net income largely consists of changes in the fair
Brighthouse Financial — Corporate Update (March 2018) on 6ix