Brighthouse Financial is back. Back making noise in the life insurance market, that is, with a 44% increase in year-over-year sales in the first quarter.
Created in 2017 as a spinoff from MetLife, Brighthouse primarily focused on annuities in its initial product development. That changed in 2019, when the company offered SmartCare, an indexed universal life with a long-term care benefit.
Brighthouse continues to broaden distribution and grow life insurance sales, CEO Eric Steigerwalt said on a conference call with analysts this morning.
"We said we were going to get back in this as a new business proposition," he explained. "We kept all of our infrastructure as we were coming up with our flagship product SmartCare and we intend to grow it year over year over year."
Adjusted earnings in the Life segment were $42 million in the current quarter, compared with adjusted earnings of $11 million in the first quarter of 2020 and $13 million in the fourth quarter 2020.
On a quarter-over-quarter basis, adjusted earnings reflect higher net investment income, partially offset by a lower underwriting margin. On a sequential basis, adjusted earnings, less notable items, reflect higher net investment income.
Brighthouse reported a first-quarter loss of $585 million, after reporting a profit in the same period a year earlier.
The Charlotte, North Carolina-based company said it had a loss of $6.96 per share. Earnings, adjusted for one-time gains and costs, were $4.86 per share. The results beat Wall Street expectations. The average estimate of three analysts surveyed by Zacks Investment Research was for earnings of $2.42 per share.
The annuity and life insurance company posted revenue of $938 million in the period. Its adjusted revenue was $2.37 billion.
Annuity Peaks And Valleys
Brighthouse similarly reported an 8% year-over-year quarterly increase in annuity sales. Those sales were led by its top-selling Shield index-linked annuity line and the FlexChoice variable annuities.
"We do expect a decline in fixed-deferred-rate annuities," said Myles Lambert, chief distribution and marketing officer. "This juncture we feel like the growth in our core product sales should be able to offset the decline that we should see with fixed rate deferred annuities."
Annuity sales decreased 28% from the fourth quarter 2020, "mainly driven by lower sales of fixed deferred annuities, which offset the growth in Shield Level Annuities and variable annuities with FlexChoice Access," Brighthouse said.
However, adjusted earnings in the annuities segment were $336 million in the first quarter, a 15% increase over the fourth quarter 2020.
On a quarter-over-quarter basis, adjusted earnings reflect higher net investment income, higher fees and lower reserves, partially offset by higher deferred acquisition costs, amortization and higher expenses.
Brighthouse Financial shares have risen 35% since the beginning of the year. In the final minutes of trading on Monday, shares hit $48.92, a rise of 70% in the last 12 months.
InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at [email protected] Follow him on Twitter @INNJohnH.