Earnings

Corebridge Financial tallies strong annuity, life sales numbers in Q3

Corebridge Financial is the No. 2 seller of annuities.

By John Hilton

Corebridge Financial is a late entrant to the red-hot registered indexed-linked annuity market, but the insurer is not taking a backseat.

Executives touted the recent launch of its MarketLock RILA during a third-quarter call Tuesday with Wall Street analysts. The product makes Corebridge the biggest annuity seller to offer products in every major category.

CEO Kevin Hogan declined to offer sales or earnings targets for the new product.

“The initial reception has been very strong in the first couple of weeks, but it is just the first couple of weeks,” Hogan said. “The pipeline is building quickly. The number of producers that have been trained on the product is increasing on a daily basis, and we're seeing that pipeline continue to build. We're excited about the RILA product because it has attractive margins, it supports our overall diversification, and it fits within our overall strategy.”

Corebridge is the former AIG Life & Retirement business and is wrapping up a years-long separation. It started corporate life as the No. 2 seller of annuities behind Athene Annuity & Life, and took on a $3.8 billion investor in Nippon Life, Japan’s largest life insurer, earlier this year.

The insurer took the already strong annuity sales of AIG Life and Retirement and supercharged the numbers. During the first half of the year, Corebridge moved nearly $14.5 billion in annuities, LIMRA reported.

The new RILA rollout represents the insurer’s “largest new product launch ever,” Hogan said.

Due to the strong sales, Corebridge saw a 40% increase in premiums and deposits for its Individual Retirement business.

It left analysts wondering how much more growth is possible in the annuity market. Hogan cited two reasons why he thinks sales can go higher. For starters, the sheer size of the near-retirement population.

From 2024 through 2027, more than 11,200 Americans will turn 65 each day, according to the Alliance for Lifetime Income, which is about 4.1 million Americans per year. This represents a record number of people reaching retirement age.

“The second thing I would say is that … there's been a whole new range of advisors in the last couple of years that have learned about the value of annuities as part of that long-term savings program,” Hogan said. “So, we believe that the conditions for the annuity business are going to continue to be very supportive.

“Whether the volumes will continue at the pace of the last couple of quarters is really going to depend on what the conditions are each quarter, where interest rates are, where people believe interest rates are going to go.”

The comments were similar to those shared with investors during a September event.

Life insurance sales cited

Corebridge also sells life insurance, Hogan reminded analysts, and that business also had “a very strong” Q3. Sales rose 14% year over year and continue to outpace the industry, he noted, and have for eight consecutive quarters.

“Our modern approach to new business is a key reason for this success,” Hogan said. “With our data-driven practices, 80% of newly issued policies are auto decision. Building off this capability, we have developed a digital policy application process called SimpliNow that provides a contemporary purchasing experience with the underwriting decision typically delivered in a matter of minutes.”

Management Commentary

“Corebridge maintains a compelling mix of fee income, spread income and underwriting margin, with all three again increasing year over year. Additionally, we grew premiums and deposits by 5% over the prior year quarter to $9.6 billion, capitalizing on market dynamics and the benefits of our broad product suite and distribution network.”

– CEO Kevin Hogan

Financial Overview

Net Income: -$1.2 billion ($2.1 billion in Q3 2023)

Earnings Per Share: $1.38 ($1.05 in Q3 2023)

Operating Income: $810 million ($675 million in Q3 2023)

Share repurchases: $715 million

Dividend declared: $0.23 per share

Stock price movement: Down about 5% Tuesday afternoon to $30.05

Segment Performance

Life Insurance:

Premium and Deposits: $856 million ($1.1 billion in Q3 2023)

Underwriting Margin: $392 million ($384 million in Q3 2023)

Operating Income: $156 million ($136 million in Q3 2023)

Individual Retirement (includes annuities):

Premium and Deposits: $5.5 billion ($4 billion in Q3 2023)

Fee Income: $321 million ($289 million in Q3 2023)

Operating Income: $657 million ($576 million in Q3 2023)

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.