Corebridge turns big annuity sales, new reinsurance deal into strong Q2

Corebridge Financial delivered the expected second-quarter financial performance from an annuity-focused company, amid a record-breaking quarter for annuity sales.

The Houston-based company reported total adjusted revenues up 5.8% year-over-year to $4.42 billion. Profit of $1.36 per share was 18.3% above analysts’ consensus estimates, Yahoo reported.

Late in 2024, Corebridge became the largest annuity seller to offer a full suite of annuity products when it introduced a registered indexed-linked offering.

The MarketLock RILA  employs a "lock strategy" that locks and credits a rate based on actual S&P 500 index performance on the day the preset growth target is reached. Once the gains are locked in, consumers are guaranteed a fixed rate of interest until the next contract anniversary, when they can transfer assets to any available MarketLock strategy account option.

Overall, Individual Retirement segment sales exceeded last year's record second quarter and cumulative sales of the RILA product passed $1 billion dollars just nine months after initial launch.

It all matched what LIMRA reported from the industry during Q2: Total annuity sales up 5% year over year to $116.6 billion.

There is room for even more growth, Hogan insisted during a Tuesday conference call with Wall Street analysts.

“Demand for the annuities remains robust across the board, and the conditions continue to be very attractive,” he said. “Where the belly of the yield curve is remains very supportive. The long-term macro drivers are very powerful, whether that's the aging of the population, the recognition that people have to look after themselves, and a very supportive advisor community.”

In Other News:

New reinsurance deal. Corebridge executives spent a good deal of time extolling the benefits of a new reinsurance agreement with CS Life Re, a subsidiary of Venerable Holdings. CS Life will reinsure all the variable annuities of Corebridge’s Individual Retirement business, with account value totaling $51 billion.

The transaction is valued at $2.8 billion, consisting of both ceding commission and capital release, and will generate approximately $2.1 billion of net distributable proceeds after-tax for Corebridge, the insurer announced in a news release.

The deal, expected to close during the fourth quarter, is “the most important value creation action we have taken” since splitting from AIG in 2022 and undergoing an initial public offering, Hogan said.

“This transaction also helps further improve the quality of our earnings and the risk profile of our balance sheet by reducing net income volatility while mitigating other risks intrinsic to the VA book post transaction,” he explained.

Elevated surrenders. Corebridge executives warned about elevated surrenders during recent calls and expect higher fixed annuity and indexed annuity surrenders later in 2025. Surrenders are part of the business and merely reflect where “yields and credit spreads are at any given point in time,” Hogan said.

“We're prepared for surrenders as part of managing this business,” he added. “And as we've seen historically, when the conditions suggest surrender rates are higher, new business is also higher.”

Quarterly Snapshot:

• Premiums and deposits of $10.8 billion.
• Holding company liquidity of $1.3 billion.
• Net income loss of $660 million, compared to a gain of $365 million in the prior-year quarter. The variance largely was a result of higher realized losses in Q2 compared to a gain on the divestiture of the sale of a UK business in the prior-year quarter.

Management Perspective:

“With more than four million Americans turning 65 every year, there's a massive need for both accumulation and decumulation annuity products to help people navigate retirement. Corbridge’s broad annuity product suite and extensive distribution network position us well to win in this space.”

CEO Kevin Hogan

By The Numbers:

• Total Revenue: $4.4 billion ($4.2 billion in Q2 2024)
• Operating Income: Adjusted after-tax operating income of $750 million ($692 million in Q2 2024)
• Earnings Per Share: $1.36 ($1.13 in Q2 2024)
• Share Repurchases: $311 million in Q2 2025
• Dividend Declared:  $0.24 per share in Q2 2025
• Stock Price Movement: Stock declined about 2% as of late Tuesday to $34.10.

Life Picture:

- Premiums and Deposits: $868 million ($846 million in Q2 2024)

- Adjusted Pre-tax Operating Income: $133 million ($95 million in Q2 2024)

Individual Retirement Picture:

- Premiums and Deposits: $6.85 billion ($6.79 billion in Q2 2024)

- Adjusted Pre-tax Operating Income: $623 million ($621 million in Q2 2024)

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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.