F&g Annuities & Life, Inc. · NYSE:FG
F&g Annuities & Life — FY2024 Earnings Presentation
49 slides from F&g Annuities & Life's earnings presentation, Feb 20, 2025
Slide 1: F&G Investor Update Winter 2024
F&G Investor Update Winter 2024
Slide 2: Disclaimer & Forward-Looking Statements
Disclaimer & Forward-Looking Statements 2F&G Investor Update | Winter 2024 This presentation contains forward-looking statements that are subject to known and unknown risks and uncertainties, many of which are beyond our control. Some of the forward-looking statements can be identified by the use of
Slide 3: Non-GAAP Financial Measures
Non-GAAP Financial Measures 3F&G Investor Update | Winter 2024 Generally Accepted Accounting Principles ("GAAP") is the term used to refer to the standard framework of guidelines for financial accounting. GAAP includes the standards, conventions, and rules accountants follow in recording and summari
Slide 4: Executing To Deliver Shareholder Value
✓ Market leading, multi-channel sales platform ✓ Achieved record sales in 2024 ✓ Record AUM before flow reinsurance and retained AUM ✓ Continued strong performance from our diversified, well positioned and high quality investment portfolio ✓ Generating both ROA and ROE expansion from strong and dive
Slide 5: Fourth Quarter & Full Year Financial Highlights
ANE ($M) and Per Share 4Q23 4Q24 Favorable / (Unfavorable) ($M) Per share ($M) Per share Alternatives investment short-term returns versus long-term return expectations (37) ($0.30) (32) ($0.25) Other significant (income) expense items (19) ($0.15) 22 $0.17 Fourth Quarter & Full Year Financial Highl
Slide 6: About F&G Snapshot
About F&G Snapshot 6F&G Investor Update | Winter 2024 Retail Annuities • Fixed indexed annuity (FIA) • Registered index-linked annuities (RILA) • Multi-year guaranteed annuity (MYGA) Pension Risk Transfer (PRT) Life Insurance • Indexed universal life (IUL) Funding Agreements • Funding agreement back
Slide 7: F&G's Competitive Advantages
F&G’s Competitive Advantages 7F&G Investor Update | Winter 2024 v Track Record of Success We have delivered consistent top line growth and return on assets across varying market cycles, and we expect to continue to outperform the rest of the market, whether rates are rising or falling v Targeting La
Slide 8: We Have Generated Strong Returns Over Time
We Have Generated Strong Returns Over Time 8F&G Investor Update | Winter 2024 1Calculated as adjusted net earnings attributable to common shareholders ex significant items on a rolling four quarter basis, divided by average F&G equity attributable to common shareholders ex accumulated other comprehe
Slide 9: We Are Driving Toward Our Investor Day Targets
We Are Driving Toward Our Investor Day Targets • Spread-based earnings • Driven by asset growth • Margin expansion through investment margin & scale benefit Retained Sales • Fee-based earnings • Lower marginal cost of capital • Enhances cash flow • Accretive to return on equity Flow Reinsurance • Fe
Slide 10: We Have A Clean & Profitable Inforce Book
We Have A Clean & Profitable Inforce Book 10F&G Investor Update | Winter 2024 Our inforce liabilities are surrender charge protected and our asset and liability cash flows are well matched; our inforce book does not contain typical problematic legacy business • Our liability profile drives our inves
Slide 11: We Are Playing In High Growth Markets
We Are Playing In High Growth Markets 11F&G Investor Update | Winter 2024 The U.S. retirement and middle markets are growing and we are both well established and well positioned for continued growth in our retail channels and institutional markets 13Q24 Quarterly Retirement Market Data, Investment C
Slide 12: With Secular Tailwinds Driving Demand
58 63 71 76 78 80 82 2022 2025 2030 2035 2040 2045 2050 … With Secular Tailwinds Driving Demand 12F&G Investor Update | Winter 2024 We continue to see sustainable demand for our retail fixed annuity products given current environment • U.S. consumers are holding more than $4 trillion in retail money
Slide 13: And We're Winning
… And We’re Winning … 13F&G Investor Update | Winter 2024 1CAGR reflects 2019-2024 annual periods Annual Gross Sales by Retail Channel and Institutional Market ($B) 2019 2020 2021 2022 2023 2024 Funding Agreements Agent PRT Broker Dealer Bank $11.3B $9.6B $4.5B $3.9B FNF and F&G Merger (June 2020) $
Slide 14: While Significantly Diversifying Our Business
46% 27% 5% 7% 15% $15.3B … While Significantly Diversifying Our Business 14F&G Investor Update | Winter 2024 Note: Reflects Gross Sales 38% 31% 7% 9% 15% $13.2B 84% 5% 7% 4% $4.5B FY2023 Sales C h a n n e l P ro d u c t 36% 39% 1% 9% 15% $13.2B 77% 17% 1% 5% $4.5B FY2020 Sales FY2024 Sales 44% 33% 1
Slide 15: Our Owned Distribution Track Record
Our Owned Distribution Track Record 15F&G Investor Update | Winter 2024 Our owned distribution strategy is contributing to margin expansion and is a capital light, diversified source of fee-based earnings Portfolio is performing as expected • FY2024 EBITDA (cash): ~$65M • Owned distribution margin d
Slide 16: Our High Quality & Well-Diversified Portfolio
58% NAIC 1 25% NAIC 2 6% LP 5% Cash³ 3% Other² 2% NAIC 3 1% NAIC 4/5/6 30% Corporates 23% Structured Securities 15% Private Origination 11% Mortgage Loans 6% Alternatives (LP) 4% Gov't & Treasury 3% Other ² 3% Municipal 2% EMD 2% Pfd/Hybrid 1% Cash Our High Quality & Well-Diversified Portfolio1 16F&
Slide 17: Our Investment Portfolio Key Attributes
Our Investment Portfolio Key Attributes 17 Investment Rationale • Core fixed income: Focus remains high grade public and private securities with strong risk adjusted returns • Structured credit: Provides access to well diversified, high-quality assets across CLOs, CMBS and ABS • Mortgage loans: Supe
Slide 18: Our Track Record of Profitable Growth
Net Sales 9.0 9.2 10.6 2.5 2.5 8.5 10.0 12.0 3.0 2.5 2.8 3.2 3.3 11.3 13.2 15.3 4.1 3.5 2022 2023 2024 4Q23 4Q24 Institutional Markets Retail Channels 353 335 546 75 143 2022 2023 2024 4Q23 4Q24 Our Track Record of Profitable Growth Gross Sales ($B) Average Assets Under Management (AAUM) ($B) Common
Slide 19: Our Robust Gross Sales With Pricing Discipline
Our Robust Gross Sales With Pricing Discipline Gross Sales Growth ($B) 8.5 10.0 12.0 3.0 2.8 3.2 3.5 2.5 2.8 3.2 3.3 1.1 0.7 1.2 0.4 1.0 11.3 13.2 15.3 4.1 3.5 4.4 3.9 3.5 2022 2023 2024 4Q23 1Q24 2Q24 3Q24 4Q24 Institutional markets Retail channels F&G Investor Update | Winter 2024 2024 VPY: 16% 4Q
Slide 20: Steady & Growing Adjusted Return on Assets
353 335 546 75 108 139 156 143 2022 2023 2024 4Q23 1Q24 2Q24 3Q24 4Q24 Net earnings (loss) 635 (58) 622 (299) 111 198 (10) 323 Op Exp (bps) 59 63 60 63 63 61 62 60 ANE per share $3.07 $2.68 $4.30 $0.60 $0.86 $1.10 $1.22 $1.12 Adj. ROA1 1.18% 1.17% 1.27% 1.17% 1.25% 1.30% 1.32% 1.27% Adj. ROE1 10% 10
Slide 21: Our Scalable Adjusted ROA Model – FY2024
537 bps 298 bps 16 bps 9 bps (137) bps 127 bps1,2 Portfolio Earned Yield Cost of Funds Flow Reinsurance Fee Income Owned Distribution Margin Expenses (Operating, Interest, Taxes, Pref. Dividends) Common Adjusted Net Earnings excluding significant items Our Scalable Adjusted ROA Model1 – FY2024 21F&G
Slide 22: Our Expanding ROA Despite Volatile Rates
80 84 93 118 117 127 2019 2020 2021 2022 2023 FY2024 0 bps 20 bps 40 bps 60 bps 80 bps 100 bps 120 bps 140 bps 160 bps 180 bps 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% Our Expanding ROA Despite Volatile Rates F&G’s primary “spread model” generates stable return on assets (ROA) despite volatility in intere
Slide 23: Our Stable and Strong Capital Profile
Our Stable and Strong Capital Profile 23F&G Investor Update | Winter 2024 1Excluding accumulated other comprehensive income (ex AOCI) Total Capitalization ex AOCI1 ($M) 5,223 5,093 5,749 5,749 250 250 1,100 1,760 2,195 2,270 6,323 6,853 8,194 8,269 YE 2022 YE 2023 YE 2024 Pro Forma YE 2024 Debt Pref
Slide 24: We Are Achieving Higher Ratings Over Time
2020 2021 2022 2023 2024 We Are Achieving Higher Ratings Over Time 24F&G Investor Update | Winter 2024 Upgraded to ‘A-’ FNF Merger Completed F&G Partial Spinoff $2.4B Market Cap Launched Flow Reinsurance Launched Owned Distribution F&G at 12/31/2024 $5.3B Market Cap Upgraded to ‘A-’ Upgraded to ‘Baa
Slide 25: Our Capitalization Supports Growth & Dividend
Our Capitalization Supports Growth & Dividend 25F&G Investor Update | Winter 2024 F&G’s capital allocation priorities focus on deploying capital to best maximize shareholder value through both continued investment in our business and generation of distributable cash for return of capital to sharehol
Slide 26: Appendix – Investments
APPENDIX Appendix – Investments
Slide 27: Investment Portfolio Stress Testing
Investment Portfolio Stress Testing 27F&G Investor Update | Winter 2024 • Moderate, Severe Recession and Stagflation scenarios modeled by F&G and Blackstone investments and risk teams • Moderate Recession: Based on characteristics from recessions in 1990/1991 (1st Gulf War), 2001 (dot-com and 9/11)
Slide 28: Stress Test: Results & No Management Actions
Stress Test: Results & No Management Actions 28F&G Investor Update | Winter 2024 Stress Test Scenario Results by Asset Class 1Stress test assumption as of 12/31/2024 2Reflects fixed income other than temporary impairment (OTTI) Before Stress Test, excess capital at 350% RBC is $0.5B1 Moderate Recess
Slide 29: Stress Test: Management Actions to Mitigate Impact
Stress Test: Management Actions to Mitigate Impact 29F&G Investor Update | Winter 2024 Capital Position Before & After Stress & Management Actions ($B) Moderate Stress Impact on Excess Capital Severe Stress Impact on Excess Capital Stagflation Impact on Excess Capital Total Excess CapitalDecreaseInc
Slide 30: Structured Credit – Why We Like It
12% Royalty & Licensing 9% Lender Finance 8% Residential Solar 7% Home Improvement 7% Private Equity Finance 6% Aviation 5%Whole Business 5% Manufactured Housing 5% Consumer Loans 4% Towers 32% All Other (< Top 10) Structured Credit – Why We Like It 30F&G Investor Update | Winter 2024 Investment Rat
Slide 31: Portfolio Spotlight: CLO
Portfolio Spotlight: CLO 31F&G Investor Update | Winter 2024 Highly diversified portfolio with ample par subordination • Blackstone’s broad & deep understanding of the asset class, and ability to perform loan level underwriting, distinguishes F&G’s portfolio from its peers F&G CLO Portfolio Composit
Slide 32: Our CLO Portfolio: Look Through Analysis
Our CLO Portfolio: Look Through Analysis 32F&G Investor Update | Winter 2024 Portfolio focused on high quality CLO securities backed by highly diversified pool of loans Note: GAAP Fair Values as of 12/31/2024 IndustriesCompaniesCLO Managers 89 CLO managers 1,916 Companies 32 Industries 7.9% 3.5% 3.3
Slide 33: U.S. CLO Impairment Frontier
U.S. CLO Impairment Frontier 33F&G Investor Update | Winter 2024 CLO debt is well insulated from higher defaults and lower recovery rates • BBB CLOs can withstand an annualized default of 9.4% (that would have to occur every year) assuming a 63.5% average long- term loan recovery rate U.S. CLO Impai
Slide 34: Portfolio Spotlight: Real Estate Debt
Portfolio Spotlight: Real Estate Debt 34F&G Investor Update | Winter 2024 Blackstone Real Estate Debt Strategies (BREDS) has assembled a high-quality portfolio with diversified exposure across asset classes and properties Note: GAAP Fair Values as of 12/31/2024 36% CMBS 28% RML 16% CML 15% RMBS 5% N
Slide 35: Portfolio Spotlight: CMBS & RMBS
Portfolio Spotlight: CMBS & RMBS 35F&G Investor Update | Winter 2024 Note: GAAP Fair Values as of 12/31/2024 By Asset Type By Property Type By NAIC Rating 30% 30% 18% 10% 7% 5% 4Q24 SASB RMBS CRE CLOs Conduit (Below A) Conduit (A or above) Agency 58% 10% 9% 9% 7% 4% 3% 4Q24 Multifamily Office Other
Slide 36: Portfolio Spotlight: CMBS
Portfolio Spotlight: CMBS 36F&G Investor Update | Winter 2024 Prudent asset selection has led to more multifamily exposure and less retail vs. Conduit CMBS market averages Portfolio Construction Comparison1 Note: GAAP Fair Values as of 12/31/2024 1BAML Conduit Data as of 12/31/2024 41% 5% 14% 24% Mu
Slide 37: Portfolio Spotlight: CMLs
Portfolio Spotlight: CMLs 37F&G Investor Update | Winter 2024 Investment Rationale • Our Commercial Mortgage Loan (CML) portfolio is low risk, low leveraged and well diversified • All first mortgage loans, with average loan-to-value of ~60% • 73 holdings, with average loan size of $29M • 1.4% of CML
Slide 38: Blackstone Related Important Disclosures
Blackstone Related Important Disclosures 38F&G Investor Update | Winter 2024 This document (together with any attachments, appendices, and related materials, the “Materials”) is provided for informational due diligence purposes only and is not, and may not be relied on in any manner as legal, tax, i
Slide 39: Appendix – Finance
APPENDIX 39F&G Investor Update | Winter 2024 Appendix – Finance
Slide 40: Book Value Per Share Growth – FY2024
Book Value Per Share Growth – FY2024 40F&G Investor Update | Winter 2024 BVPS ex AOCI of $44.28 after MTM, ↑ 10% vs. prior year • $3.75 per share increase due to underlying business performance • ($1.04) per share decrease for return of capital • $1.15 per share increase due to mark-to-market moveme
Slide 41: Non-GAAP Measure Reconciliations
Non-GAAP Measure Reconciliations1 41F&G Investor Update | Winter 2024 1Refer to “Non-GAAP Measures Definitions” Year ended Three months ended ($ in millions) December 31, 2022 December 31, 2023 December 31, 2024 December 31, 2023 March 31, 2024 June 30, 2024 September 30, 2024 December 31, 2024 Net
Slide 42: ANE – Significant Items
ANE – Significant Items1 42F&G Investor Update | Winter 2024 1Refer to Reconciliation of net earnings (loss) to adjusted net earnings attributable to common shareholders on page 41 ($ and shares in table in millions) Significant Income and Expense Items (Reflected in Adjusted Net Earnings) Alternati
Slide 43: ANE – Significant Items (cont.)
ANE – Significant Items1 (cont.) 43F&G Investor Update | Winter 2024 1Refer to Reconciliation of net earnings (loss) to adjusted net earnings attributable to common shareholders on page 41 ($ and shares in table in millions) Significant Income and Expense Items (Reflected in Adjusted Net Earnings) A
Slide 44: Non-GAAP Measures and Definitions
Non-GAAP Measures and Definitions 44F&G Investor Update | Winter 2024 The following represents the definitions of non-GAAP measures used by F&G Adjusted Net Earnings attributable to common shareholders Adjusted net earnings attributable to common shareholders is a non-GAAP economic measure we use to
Slide 45: Non-GAAP Measures and Definitions (cont.)
Non-GAAP Measures and Definitions (cont.) 45F&G Investor Update | Winter 2024 Adjusted Net Earnings attributable to common shareholders per Diluted Share Adjusted net earnings attributable to common shareholders per diluted share is calculated as adjusted net earnings plus preferred stock dividend (
Slide 46: Non-GAAP Measures and Definitions (cont.)
Non-GAAP Measures and Definitions (cont.) 46F&G Investor Update | Winter 2024 Adjusted Weighted Average Diluted Shares Outstanding Adjusted weighted average diluted shares outstanding is the same as weighted average diluted shares outstanding except for periods in which our preferred stocks are calc
Slide 47: Non-GAAP Measures and Definitions (cont.)
Non-GAAP Measures and Definitions (cont.) 47F&G Investor Update | Winter 2024 AUM before Flow Reinsurance AUM before Flow Reinsurance is comprised of components consistent with AUM, but also includes flow reinsured assets. Management considers this non-GAAP financial measure to be useful internally
Slide 48: Non-GAAP Measures and Definitions (cont.)
Non-GAAP Measures and Definitions (cont.) 48F&G Investor Update | Winter 2024 Sales Annuity, IUL, funding agreement and non-life contingent PRT sales are not derived from any specific GAAP income statement accounts or line items and should not be viewed as a substitute for any financial measure dete
Slide 49: Non-GAAP Measures and Definitions (cont.)
Non-GAAP Measures and Definitions (cont.) 49F&G Investor Update | Winter 2024 Total F&G Equity attributable to common shareholders, excluding AOCI Total F&G equity attributable to common shareholder, excluding AOCI is based on total F&G Annuities & Life, Inc. shareholders' equity excluding the effec