Corebridge Financial Inc. · NYSE:CRBG
Corebridge Financial — Q3 2022 Earnings Presentation
30 slides from Corebridge Financial's earnings presentation, Nov 9, 2022
Slide 1: Third Quarter 2022 Financial Results Presentation
Third Quarter 2022 Financial Results Presentation corebridge* financial November 9, 2022 Copyright © 2022 by Corebridge Financial, Inc. All rights reserved. No part of this document may be reproduced, republished or reposted without the permission of Corebridge Financial, Inc.
Slide 2: Cautionary statement regarding forward-looking information, non-GAAP financial measures, key operating metrics
Cautionary statement regarding forward-looking information, non-GAAP financial measures, key operating metrics and key terms Note: in this presentation, “we, entity. us” and “our” refer to Corebridge and its consolidated subsidiaries, unless the context refers solely to Corebridge as a corporate CAU
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 > 400%+ Life Fleet RBC Ratio! 25% - 30% Target financial leverage? ——___ 7 Profitability 12% - 14% Adjusted ROAE'3 ~ (— Capital return ) $600 million Aggregate annual stockholder dividends 60% - 65% Payout r
Slide 4: Solid core business results and focused execution
Solid core business results and focused execution Results overview Capital and liquidity Strategic initiatives Operating EPS! of $0.57 and adjusted ROAE! of 6.8% Premiums and deposits! of $8.8 billion reflect growth in all four businesses; up 23% year-over-year Year-over-year base net investment spr
Slide 5: Short-term market headwinds offset by long-term tailwinds from rising rates
rt-term market headwinds offset by long-term tailwinds from rising rates Adjusted return on average equity’ 3Q22 APTOI' Operating ($M) EPs! Annual actuarial assumption review (57) (0.07) Adjustment to legacy investments (41) (0.05) 3Q21 Reduction of effective tax rate n/a 0.05 3022 Notable items (98
Slide 6: Diversified earnings sources support attractive returns in various market conditions
Diversified earnings sources support attractive returns in various market condition Sources of income! ($M) Base spread income improved due to impact of higher new money 2,105 rates + Roughly 300 basis point improvement in new money rates since Dec. 31, 2021 + Higher new money rates provide signific
Slide 7: Base net investment income growth, market-driven variable investment income
Base net investment income growth, market-driven variable investment income 4.03% 3.84% 4.08% 1,978 1,995 } 120 | 3Q21 2Q22 3Q22 1.86% 1.94% y 1.66% 1.59% 1.52% 132% ) 3Q21 2Q22 3Q22 3Q21 2Q22 3Q22 Base portfolio income Vil Individual Retirement Group Retirement
Slide 8: Corebridge Forward and Separation expenses
Corebridge Forward Expense savings through. execution of the following initiatives + Expand current outsourcing initiatives + Refine the target operating model end state Complete cloud migration, exit data centers, optimize the ‘run’ model Rationalize real estate footprint Separation Expenses incurr
Slide 9: Annual actuarial assumption review
Annual actuarial assumption review | 3Q22 By segment 3Q22 Modest impact with _ . oes Individual Retirement (86) no significant reserve adjustments Group Retirement 2 + No additional reserves for Life Insurance 24 [life with id wage guarantees Win Seis EI) Institutional Markets 3 Rising interest rate
Slide 10: Individual Retirement
Individual Retiremen Contribution to 3Q22 sources of income Higher new money rates benefit base spread income Market conditions result in lower VII and fee income, partially offset by higher base spread income Year-over-year results also reflect comparatively better impact from annual actuarial assu
Slide 11: Group Retirement
Group Retirement test 2,039 . 145 332 347 | 236 | Contribution to 3Q22 sources of income 3Q21 3Q22 In-plan i Out-of-plan variable annuities Higher new money rates Out-of-plan fixed and fixed index annuities benefit base spread income Market conditions result in lower VII and fee income, partially of
Slide 12: Life Insurance
Life Insurance Contribution to 3Q22 sources of income COVID mortality in line with previously disclosed exposure sensitivity of $65 million to $75 million per 100,000 U.S. population deaths Market conditions drive lower VII Year-over-year results also reflect comparatively less favorable impact from
Slide 13: Institutional Markets
Institutional Markets Contribution to 3Q22 sources of income * Market conditions result in lower VII partially offset by higher base spread income driven by higher new money rates and reserve growth + Year-over-year reported comparison reflects robust transactional activity in 3Q22 (i.e., pension ri
Slide 14: Maintaining strong balance sheet and delivering on financial goals
Maintaining strong balance sheet and delivering on financial goals $296 million Capital return to shareholders post-IPO > 400% Life Fleet RBC Ratio! Paid third quarter common stock dividend on October 20 Declared fourth quarter common stock dividend on November 8 to be paid on December 30 Continue t
Slide 15: Appendix contents
Important factors that could cause actual results to differ, possibly materially, from expectations or estimates Use of non-GAAP financial measures Key operating metrics and key terms Non-GAAP reconciliations and other financial disclosures
Slide 16: 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 17: 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 a
Slide 18: Use of non-GAAP financial measures (continued)
Use of non-GAAP financial measures (continued from prior page) opportunistic scenarios to buy or sell invested assets. Our derivative results, including those used to economically hedge insurance liabilities, also included in net realized gains (losses) are similarly excluded from APTOI except earne
Slide 19: Use of non-GAAP financial measures (continued)
Use of non-GAAP financial measures (continued from prior page) . separation costs; . non-operating litigation reserves and settlements; + loss (gain) on extinguishment of debt; + losses from the impairment of goodwill; and + income and loss from divested or run-off business. Adjusted after-tax opera
Slide 20: Use of non-GAAP financial measures (continued)
Use of non-GAAP financial measures (continued from prior page) Adjusted revenues exclude Net realized gains (losses) except for gains (losses) related to the disposition of real estate investments, income from non-operating litigation settlements (included in Other income for GAAP purposes) and chan
Slide 21: 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 22: Key operating metrics and key terms (continued)
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 23: Non-GAAP reconciliations: pre-tax to adjusted income
Non-GAAP reconciliations and other financial Noneontoing interests ° disclosures 188 Fortitude Re Related items Net investment income on Fortitude Re funds withheld assets (445) Net realized (gains) losses on Fortitude Re funds withheld assets (169) Net realized losses on Fortitude Re funds withheld
Slide 24: Non-GAAP reconciliations: adjusted pre-tax operating income by segment
Non-GAAP reconciliations and other financial disclosures Adjusted pre- tax operating income by segment Premiums Policy fees Net investment income” Net realized gains (losses)*™” Advisory fee and other income Policyholder benefits Interest credited to policyholder account balances" Amortization of de
Slide 25: Non-GAAP reconciliations: sources of earnings
Non-GAAP reconciliations and other financial disclosures Sources of earnings (in millions) Individual Retirement Fee income!*) Spread income Total Individual Retirement) Group Retirement Fee income Spread income Total Group Retirement Life Insurance Underwriting margin Total Life Insurance Instituti
Slide 26: Non-GAAP reconciliations: sources of earnings (continued)
Non-GAAP reconciliations and other financial disclosures Sources of earnings (continued) Premiums: Policy fees Net investment income Other income Policyholder benefits Interest credited to policyholder account balances Less: impact of annual actuarial assumption update Net investment income Interest
Slide 27: Non-GAAP reconciliations: operating earnings per share
Non-GAAP reconciliations and other financial disclosures Operating earnings per share sme will no longer be applicable. al, Inc. spit its 10,0 ina 6,450 to 1 stock split fora total le class of Common Stock been applied retr associated with the sale of the affordable housing portfo Prior to September
Slide 28: Non-GAAP reconciliations: normalized distributions, book value, ROAE
Non-GAAP reconciliations and other financial disclosures Normalized distributions Adjusted book value per share Adjusted return on average equity Subsidiary dividends paid Less: Non-recurring dividends Tax sharing payments related to utilization of tax attributes Total Corebridge shareholders’ equit
Slide 29: Non-GAAP reconciliations: net investment income (APTOI basis)
Non-GAAP reconciliations and other financial disclosures Net investmen income (APTOI basis) (in millions) Net investment income (net income basis) Net investment (income) on Fortitude Re funds withheld assets Change in fair value of securities used to hedge guaranteed living benefits Other adjustmen
Slide 30: Non-GAAP reconciliations: premiums and deposits
Non-GAAP reconciliations and other financial disclosures Premiums and deposits (in millions) Individual Retirement Premiums Deposits Other Premiums and deposits Group Retirement Premiums Deposits Premiums and deposits Life Insurance Premiums Deposits Other Premiums and deposits Institutional Markets