Corebridge Financial Inc. · NYSE:CRBG
Corebridge Financial — Q1 2023 Earnings Presentation
33 slides from Corebridge Financial's earnings presentation, May 9, 2023
Slide 1: First Quarter 2023 Financial Results Presentation
First Quarter 2023 Financial Results Presentation May 9, 2023
Slide 2: Cautionary statement regarding forward-looking information, non-GAAP financial measures
Cautionary statement regarding forward-looking information, non-GAAP financial measures, key operating metrics and key terms Note: in this presentation, “we,” “us” and “our” refer to Corebridge and its consolidated subsidiaries, unless the context refers solely to Corebridge as a corporate entity. C
Slide 3: Delivered excellent quarter while advancing key strategic initiatives
Delivered excellent quarter while advancing key Operating EPS1 strategic initiatives to achieve financial targets $0.97 Announced $1 billion share repurchase program Adjusted ROAE1 10.8% Strong organic growth, notably in spread-based businesses Holding company liquidity Positive net flows in general
Slide 4: Results reflect benefits of differentiated businesses and focused execution
Results reflect benefits of differentiated businesses and focused execution Adjusted return on average equity 1Q22 1Q22 13.5% APTOI Operating ($M) EPS ($M) 1Q23 10.8% Investments 56 0.09 Notable items 56 0.09 Operating EPS Alternative investments returns versus 159 0.19 long-term return expectations
Slide 5: Diversified income sources support attractive returns in various market conditions
Diversified income sources support attractive returns in various market conditions Sources of income1 ($M) Base spread income2 improved with higher new money rates and 1,806 growth of overall portfolio 1,760 • Approximately 250 basis point improvement since March 31, 2022 28 298 1,732 373 Fee income
Slide 6: Base yield expansion continues to benefit from attractive new money rates
Base yield expansion continues to benefit from attractive new money rates Net investment income (APTOI basis)1,2 ($M) Base yield1,3 2,223 2,277 60 2,130 28 bps 23 4.42% 4.42% 3.82% 0.15% 300 15 4.27% bps 4.42% 3.82% 4 1Q22 4Q22 1Q23 2,200 2,249 Base net investment spread3 1,830 ~55 bps ~10 2.31% 2.1
Slide 7: Strong new money rates bolster base spread income growth
Strong new money rates bolster base spread income growth New money rates1 7.0% 6.8% 6.5% 6.0% 4.9% 5.0% Yield on new money exceeds 4.2% yield on assets rolling off 4.0% portfolio by 230 basis points in 1Q23 3.9% • New money yields improved 300 3.0% 3.5% basis points since year-end 2021 Inflection po
Slide 8: Corebridge Forward and separation expense savings
Corebridge Ahead of plan to achieve nearly $400 million of exit run rate Forward savings… 2022 2023 2024 Expense savings through execution of the following $281 million1 initiatives • Refine target operating model end state • Expand current outsourcing programs • Complete cloud migration, exit data
Slide 9: Individual Retirement
Premiums and deposits ($M) Assets under management and administration ($B) Individual 4,883 151 Retirement 3,881 578 140 66 948 57 2,057 51% contribution to aggregate 1,364 30 31 sources of income 2,248 55 1,569 52 1Q22 1Q23 1Q22 1Q23 • Premiums and deposits1 reflect Fixed Annuities Fixed Index Annu
Slide 10: Group Retirement
Premiums and deposits ($M) Assets under management and administration ($B) Group 2,246 130 Retirement 1,888 535 13 118 13 130 31 268 192 27 22% contribution 30 to aggregate 26 sources of income 1,490 1,519 56 51 1Q22 1Q23 1Q22 1Q23 • Premiums and deposits In-plan Out-of-plan variable annuities In-pl
Slide 11: Life Insurance
Premiums and deposits ($M) Assets under management and administration ($B) Life 1,057 1,049 31 Insurance 213 210 28 397 398 20% contribution to aggregate sources of income 447 441 1Q22 1Q23 1Q22 1Q23 • Favorable mortality Term/Traditional Universal Life & other International experience and strong ba
Slide 12: Institutional Markets
Premiums and deposits ($M) Assets under management and administration ($B) Institutional 2,163 81 Markets 129 75 506 7% contribution to aggregate 1,528 sources of income 327 112 215 1Q22 1Q23 1Q22 1Q23 Pension Guaranteed • Premiums and deposits Risk Investment Other1 Transfer Contracts reflect trans
Slide 13: Maintaining strong balance sheet, delivering on financial goals
Maintaining strong balance sheet, Capital and liquidity Book value delivering on financial goals $1.8 billion $35.88 • $1 billion share repurchase program approved by Board Holding company liquidity1 Adjusted book value per of Directors common share2 • Second quarter dividend declared on May 8, 2023
Slide 14: High-quality, well-diversified investment portfolio
High-quality, well- diversified investment 3% 2% 2% 5% portfolio Government obligations 16% Public corporate debt Private corporate debt • Liability driven investment RMBS strategy supported by CMBS disciplined asset-liability 3% $193.0 36% CLO management process billion 1,2 ABS 6% Residential mortg
Slide 15: Commercial mortgage loans
Commercial mortgage loans Other Diversified portfolio supported by disciplined 1% Multifamily underwriting and proactive monitoring 41% Hotel 6% • Commercial mortgage loans represent 16% of total invested assets Retail $30.3 • Over half of exposure concentrated in multifamily 10% billion 1,2 and ind
Slide 16: Commercial mortgage loans | Office
Commercial mortgage loans | Office Began to reduce sector exposure several years Life science ago as view of traditional office evolved 8% Traditional • Office sector represents 4% of total invested assets $7.7 U.S. office Mixed use 10% billion 1,2 59% • Traditional US office, concentrated in major
Slide 17: Appendix
Important factors that could cause actual results to differ, possibly materially, from expectations or estimates Use of non-GAAP financial measures Appendix Key operating metrics and key terms Non-GAAP reconciliations and other financial disclosures 17
Slide 18: Important factors that could cause actual results to differ, possibly materially
Important factors that could cause actual results to differ, possibly materially, from expectations or estimates Any forward-looking statements included herein are not a guarantee of future performance and involve risks and uncertainties, and there are certain important factors that could cause actu
Slide 19: Use of non-GAAP financial measures
Use of non-GAAP financial measures Throughout this presentation, we present our financial condition and results of operations in the way we believe will be most meaningful and representative of our business results. Some of the measurements we use are ‘‘Non-GAAP financial measures’’ under Securities
Slide 20: Use of non-GAAP financial measures
Use of non-GAAP financial measures (continued from prior page) MARKET RISK BENEFIT ADJUSTMENTS: Certain of our variable annuity, fixed annuity and fixed index annuity contracts contain guaranteed minimum withdrawal benefits (“GMWBs”) and/or guaranteed minimum death benefits (“GMDBs”) which are accou
Slide 21: Use of non-GAAP financial measures
Use of non-GAAP financial measures (continued from prior page) Adjusted after-tax operating income attributable to our common shareholders (“Adjusted After-tax Operating Income” or “AATOI”) is derived by excluding the tax effected APTOI adjustments described above, as well as the following tax items
Slide 22: Use of non-GAAP financial measures
Use of non-GAAP financial measures (continued from prior page) Normalized distributions are defined as dividends paid by the Life Fleet subsidiaries as well as the international insurance subsidiaries, less non-recurring dividends, plus dividend capacity that would have been available to Corebridge
Slide 23: Key operating metrics and key terms
Key operating metrics and key terms Assets Under Management and Administration • Assets Under Management (“AUM”) include assets in the general and separate accounts of our subsidiaries that support liabilities and surplus related to our life and annuity insurance products. • Assets Under Administrat
Slide 24: Key operating metrics and key terms
Key operating metrics and key terms (continued from prior page) • Spread income is defined as net investment income less interest credited to policyholder account balances, exclusive of amortization of deferred sales inducement assets. Spread income is comprised of both base spread income and variab
Slide 25: Non-GAAP reconciliations and other financial disclosures
Non-GAAP Three Months Ended March 31, 2023 Total Tax Non- 2022 Total Tax Non- reconciliations (in millions) Pre-tax (Benefit) controlling Charge Interests After Tax Pre-tax (Benefit) controlling Charge Interests After Tax and other Pre-tax income/net income, including noncontrolling interests $ (669
Slide 26: Non-GAAP reconciliations: adjusted pre-tax operating income Q1 2023
Non-GAAP (in millions) Individual Retirement Group Retirement Life Insurance Institutional Markets Corporate & Other Eliminations Total Corebridge reconciliations Three Months Ended March 31, 2023 Premiums $ 78 $ 6 $ 425 $ 1,575 $ 20 $ — $ 2,104 and other Policy fees 174 100 375 49 — — 698 financial
Slide 27: Non-GAAP reconciliations: adjusted pre-tax operating income Q1 2022
Non-GAAP (in millions) Individual Retirement Group Retirement Life Insurance Institutional Markets Corporate & Other Eliminations Total Corebridge reconciliations Three Months Ended March 31, 2022 Premiums $ 56 $ 8 $ 425 $ 238 $ 21 $ — $ 748 and other Policy fees 185 114 384 47 — — 730 financial Net
Slide 28: Non-GAAP reconciliations: sources of income
Non-GAAP (in millions) Three Months Ended March 31, 2023 2022 reconciliations Individual Retirement and other Spread income Fee income $ 623 277 $ 542 308 financial Total Individual Retirement 900 850 disclosures Group Retirement Spread income 213 247 Fee income 176 199 Total Group Retirement 389 44
Slide 29: Non-GAAP reconciliations: sources of income (continued)
Life Insurance Non-GAAP (in millions) Three Months Ended March 31, 2023 2022 reconciliations Premiums $ 425 $ 425 and other Policy fees Net investment income 375 317 384 356 financial Other income 29 36 disclosures Policyholder benefits (708) (744) Interest credited to policyholder account balances
Slide 30: Non-GAAP reconciliations: operating earnings per share
Non-GAAP reconciliations Three Months Ended March 31, (in millions, except per common share data) 2023 2022 and other GAAP Basis Numerator for EPS financial Net income (loss) $ (453) $ 3,441 disclosures Less: Net income (loss) attributable to noncontrolling interests Net income (loss) attributable t
Slide 31: Non-GAAP reconciliations: normalized distributions and adjusted book value
Non-GAAP (in millions) Three Months Ended March 31, 2023 2022 reconciliations Subsidiary dividends paid $ 500 $ 700 and other Tax sharing payments related to utilization of tax attributes Normalized distributions $ 500 — $ 147 847 financial disclosures March 31, 2023 March 31, 2022 (in millions, exc
Slide 32: Non-GAAP reconciliations: net investment income (APTOI basis)
Non-GAAP reconciliations and other financial Three Months Ended March 31, disclosures (in millions) 2023 2022 Net investment income (net income basis) $ 2,695 $ 2,581 Net investment (income) on Fortitude Re funds withheld assets (394) (278) Change in fair value of securities used to hedge guaranteed
Slide 33: Non-GAAP reconciliations: premiums and deposits
Non-GAAP (in millions) Three Months Ended March 31, 2023 2022 reconciliations Individual Retirement and other Premiums Deposits $ 78 4,807 $ 56 3,830 financial Other (a) (2) (5) disclosures Premiums and deposits 4,883 3,881 Group Retirement Premiums 6 8 Deposits 2,240 1,880 (b)(c) Premiums and depos