Corebridge Financial Inc. · NYSE:CRBG
Corebridge Financial — Q4 2022 Earnings Presentation
35 slides from Corebridge Financial's earnings presentation, Feb 16, 2023
Slide 1: Fourth Quarter and Full Year 2022 Financial Results Presentation
Fourth Quarter and Full Year 2022 Financial Results Presentation February 17, 2023
Slide 2: Cautionary statement regarding forward-looking information and 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: Key financial goals built on strong balance sheet and attractive cash return
Key financial goals built on strong balance sheet and attractive cash return Balance sheet Profitability Capital return 400%+ $600 million Life Fleet RBC Ratio1 Aggregate annual stockholder 12% - 14% dividends Adjusted ROAE1,3,4 25% - 30% 60% - 65% Target financial leverage2 Payout ratio4,5 1. This
Slide 4: Powerful franchise delivers solid results with focused execution
Powerful franchise delivers solid results with focused execution • Operating EPS1 of $0.88 and adjusted ROAE1 of 10.6% for 4Q22, contributing to operating EPS of $2.87 and adjusted ROAE of 9.1% for full year Results • Premiums and deposits1 excluding transactional activity grew 14% compared to prior
Slide 5: Quarterly results reflect improving base spread income and underwriting margin
Quarterly results reflect improving base spread income and underwriting margin Adjusted return on average equity1 4Q21 12.1% 4Q22 4Q22 10.6% APTOI1 Operating ($M) EPS1 Adjustment to legacy investments 85 0.10 Operating EPS1 Dispute resolution (42) (0.05) Reduction of effective tax rate n/a 0.11 4Q21
Slide 6: Full year results demonstrate effective execution in a challenging environment
Full year results demonstrate effective execution in a challenging environment Adjusted return on average equity1 2022 2021 12.6% APTOI1 Operating ($M) EPS1 2022 9.1% Annual actuarial assumption review (57) (0.07) Operating EPS1 Adjustment to legacy investments 43 0.05 Dispute resolution (42) (0.05)
Slide 7: Product diversification enables us to pivot as conditions evolve
Product diversification enables us to pivot as conditions evolve Sources of income1,2 ($M) Base spread income improved due to impact of higher new money 2,009 rates, resets on floating rate positions and growth of overall portfolio 1,727 1,749 509 1,500 22 203 excluding VII 387 497 Fee income declin
Slide 8: Base net investment income growth supported by higher new money rates
Base net investment income growth supported by higher new money rates Net investment income (APTOI basis)1,2 ($M) Base yield1,2 2,357 54 2,223 bps 34 4.42% 23 3.88% 4.08% bps 511 1,995 3 4Q21 3Q22 4Q22 2,200 Base net investment spread1 1,996 1,846 ~40 bps ~20 2.21% 1.94% bps 1.67% 1.59% 1.59% 1.42%
Slide 9: Corebridge Forward savings and separation efforts
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 $232 million1 initiatives • Refine the target operating model end state • Expand current outsourcing programs • Complete cloud migration, exit d
Slide 10: Individual Retirement
Premiums and deposits1 ($M) Assets under management and administration1 ($B) Individual Retirement 3,827 160 3,308 137 652 70 Contribution 1,203 55 to 4Q22 1,749 sources of 32 income 30 1,303 1,426 58 52 802 4Q21 4Q22 4Q21 4Q22 • Premiums and deposits reflect Fixed Annuities Fixed Index Annuities Va
Slide 11: Group Retirement
Premiums and deposits1 ($M) Assets under management and administration1 ($B) Group Retirement 2,243 140 1,862 14 115 500 132 33 12 311 199 Contribution 27 to 4Q22 33 sources of 28 income 1,544 1,419 60 48 4Q21 4Q22 4Q21 4Q22 • Premiums and deposits In-plan Out-of-plan variable annuities In-plan fee
Slide 12: Life Insurance
Premiums and deposits1 ($M) Assets under management and administration1 ($B) Life Insurance 1,098 1,073 34 209 200 28 Contribution to 4Q22 444 423 sources of income 445 450 4Q21 4Q22 4Q21 4Q22 • Favorable overall mortality Term/Traditional Universal Life & other International experience and strong b
Slide 13: Institutional Markets
Premiums and deposits1 ($M) Assets under management and administration1 ($B) Institutional Markets 2,233 122 77 78 1,551 223 Contribution 2,111 to 4Q22 sources of 1,328 income 4Q21 4Q22 4Q21 4Q22 Pension • Premiums and deposits reflect Risk Other2 Transfer transactional nature of business 4 Sources
Slide 14: Maintaining strong balance sheet and delivering on financial goals
Maintaining strong balance sheet and delivering on financial goals • Paid fourth quarter shareholder dividend on $296 December 30 and declared first quarter $1.5 shareholder dividend on February 16 to be paid on million March 31 billion • Additional $2.5 billion of liquidity available under Capital
Slide 15: LDTI: No impact to economics of business, financial strength or dividend capacity
LDTI: No impact to economics of business, financial strength or dividend capacity Long duration targeted improvements Estimated equity and book value impacts Go forward impact January 1, 2021 Adjusted pre-tax operating income • GAAP equity impact • Neutral to modestly favorable compared to current a
Slide 16: 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 16
Slide 17: Important factors that could cause actual results to differ 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 18: 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 19: Use of non-GAAP financial measures
Use of non-GAAP financial measures (continued from prior page) Our investment-oriented contracts, such as universal life insurance, and fixed, fixed index and variable annuities, are also impacted by net realized gains (losses), and these secondary impacts are also excluded from APTOI. Specifically,
Slide 20: 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 21: 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 22: 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 23: 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 24: Non-GAAP reconciliations and other financial disclosures
Non-GAAP Three Months Ended December 31, 2022 Total Tax Non- 2021 Total Tax Non- reconciliations (in millions) Pre-tax income/net income, including noncontrolling Pre-tax (Benefit) controlling Charge Interests After Tax Pre-tax (Benefit) controlling Charge Interests After Tax and other $ (779) $ (25
Slide 25: Non-GAAP reconciliations and other financial disclosures
Non-GAAP Twelve Months Ended December 31, 2022 Total Tax Non- 2021 Total Tax Non- reconciliations (in millions) Pre-tax income/net income, including noncontrolling Pre-tax (Benefit) controlling Charge Interests After Tax Pre-tax (Benefit) controlling Charge Interests After Tax and other $ 10,460 $ 1
Slide 26: Non-GAAP reconciliations and other financial disclosures
Non-GAAP (in millions) Individual Retirement Group Retirement Life Insurance Institutional Markets Corporate & Other Eliminations Total Corebridge reconciliations Three Months Ended December 31, 2022 Premiums $ 62 $ 3 $ 587 $ 1,375 $ 20 $ — $ 2,047 and other Policy fees 199 104 382 49 — — 734 financ
Slide 27: Non-GAAP reconciliations and other financial disclosures
Non-GAAP (in millions) Individual Retirement Group Retirement Life Insurance Institutional Markets Corporate & Other Eliminations Total Corebridge reconciliations Three Months Ended December 31, 2021 Premiums $ 66 $ 7 $ 402 $ 2,150 $ 21 $ — $ 2,646 and other Policy fees 245 133 357 47 — — 782 financ
Slide 28: Non-GAAP reconciliations and other financial disclosures
Non-GAAP (in millions) Individual Retirement Group Retirement Life Insurance Institutional Markets Corporate & Other Eliminations Total Corebridge reconciliations Twelve Months Ended December 31, 2022 Premiums $ 230 $ 19 $ 1,871 $ 2,913 $ 82 $ — $ 5,115 and other Policy fees 836 451 1,491 194 — — 2,
Slide 29: Non-GAAP reconciliations and other financial disclosures
Non-GAAP (in millions) Individual Retirement Group Retirement Life Insurance Institutional Markets Corporate & Other Eliminations Total Corebridge reconciliations Twelve Months Ended December 31, 2021 Premiums $ 191 $ 22 $ 1,573 $ 3,774 $ 86 $ — $ 5,646 and other Policy fees 962 522 1,380 187 — — 3,
Slide 30: Non-GAAP reconciliations and other financial disclosures
Non-GAAP (in millions) Three Months Ended December 31, 2022 2021 Twelve Months Ended December 31, 2022 2021 reconciliations Individual Retirement and other Spread income Fee income (a) $ 587 304 $ 646 383 $ 2,085 1,287 $ 2,650 1,500 financial Total Individual Retirement (a) 891 1,029 3,372 4,150 dis
Slide 31: Non-GAAP reconciliations and other financial disclosures
Life Insurance Non-GAAP (in millions) Three Months Ended December 31, 2022 2021 Twelve Months Ended December 31, 2022 2021 reconciliations Premiums $ 587 $ 402 $ 1,871 $ 1,573 and other Policy fees Net investment income 382 376 357 380 1,491 1,389 1,380 1,621 financial Other income 27 30 121 110 dis
Slide 32: Non-GAAP reconciliations and other financial disclosures
Three Months Ended December 31, Twelve Months Ended December 31, Non-GAAP (in millions, except per common share data) 2022 2021 2022 2021 reconciliations GAAP Basis Numerator for EPS and other Net income (loss) $ (527) $ 3,739 $ 8,469 $ 8,284 financial Less: Net income (loss) attributable to noncont
Slide 33: Non-GAAP reconciliations and other financial disclosures
Non-GAAP (in millions) Three Months Ended December 31, 2022 2021 Twelve Months Ended December 31, 2022 2021 reconciliations Subsidiary dividends paid $ 200 $ 641 $ 1,821 $ 1,564 and other Less: Non-recurring dividends Tax sharing payments related to utilization of tax attributes — — (295) 132 401 —
Slide 34: Non-GAAP reconciliations and other financial disclosures
Non-GAAP reconciliations and other financial Three Months Ended December 31, Twelve Months Ended December 31, disclosures (in millions) 2022 2021 2022 2021 Net investment income (net income basis) $ 2,555 $ 2,925 $ 9,576 $ 11,672 Net investment (income) on Fortitude Re funds withheld assets (274) (4
Slide 35: Non-GAAP reconciliations and other financial disclosures
Non-GAAP (in millions) Three Months Ended December 31, 2022 2021 Twelve Months Ended December 31, 2022 2021 reconciliations Individual Retirement and other Premiums Deposits (a) $ 62 3,764 $ 66 3,244 $ 230 14,900 $ 191 13,473 financial Other (b) 1 (2) (10) (7) disclosures Premiums and deposits 3,827