Corebridge execs upbeat despite reporting $566M Q4 loss

Despite a brutal fourth quarter that resulted in a $566 million net loss, Corebridge Financial Inc. executives said Friday they were upbeat about the newly branded company’s prospects for the year.

Corebridge, one of the nation’s biggest retirement products and insurance providers, blamed the quarterly loss on derivative losses and “foreign exchange movements,” but still managed to beat Wall Street earnings per share estimates by $0.20, with a fourth-quarter operating EPS of $0.88 per share.

For 2022, the company said net income rose 11% from the previous year, to $8.1 billion, or $12.59 per share, with pretax operating income falling 41%, largely the result of structural changes in the business, challenging economic conditions, and lower fee income. Variable investment income was lower by $1.6 billion, the largest contributor to the year-over-year decline.

Nevertheless, the company said its businesses were performing well and growing strong.

Annuity sales cited

“Our diversified business platform and broad reach enabled robust sales and attractive margins in fixed and fixed index annuities, in addition to strong performance realized across all our businesses,” said Kevin Hogan, president and CEO. “We achieved meaningful growth in base spread income and substantial improvement in underwriting margin, and we benefited from strong deposit flows.”

Hogan said the company maintained a strong financial position throughout the year and met its capital management goals for 2022.

In a conference call with investors and analysts on Friday, Hogan was optimistic for the coming year.

“As we look ahead, the external environment remains uncertain, but we are steadfastly focused on executing our strategies and delivering on our financial goals,” he said. “We have a strong balance sheet and free cash flow profile, and we will stay disciplined in deploying capital to create value for our customers, distribution partners and other stakeholders."

Corebridge was spun out of AIG’s life and retirement division last year and went public in one of the largest IPOs 2022 raising $1.7 billion. AIG still controls nearly 78% of Corebridge’s shares, with 10% held by Blackstone.

'EPS growth' expected

“Looking ahead, we expect to achieve EPS growth resulting from our initiatives involving expense savings, investments, organic growth and capital management,” said Elias Habayeb, chief financial officer. While fee income will depend on the extent of recovery and asset valuations, we continue to expect long term return assumptions for our alternative investments will range between 8 and 9%. We have a strong balance sheet and we remain focused on delivering on our financial goals.”

The company said it paid $876 million in dividends in 2022 – $296 million since the IPO – and it declared a quarterly cash dividend of $0.23 per share.

In early trading Friday, Corebridge stock fell more than 2% to $20.22 per share.

“2022 was an important year for Corebridge,” Hogan said. “As we look ahead to 2023, we are well positioned to capitalize on the positive momentum of the last 12 months, which should bolster our ability to deliver on our commitments, and we look forward to creating long term value for our shareholders.”

Doug Bailey is a journalist and freelance writer who lives outside of Boston. He can be reached at [email protected].

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Doug Bailey is a journalist and freelance writer who lives outside of Boston. He can be reached at [email protected].