Equitable, Corebridge steam toward merger with strong Q3 annuity sales

Equitable Holdings reported a 19% increase in third-quarter adjusted earnings, citing growth in retirement sales and wealth management as the insurer prepares to merge with Corebridge Financial to expand its reach in the U.S. retirement market.

The “new Equitable” is expected to debut in early 2027 as regulatory approvals are anticipated by the end of the year, executives said. CEO Mark Pearson and the Equitable executive team held a call Tuesday morning with Wall Street analysts.

The news was mostly good.

Assets under management and administration totaled $1.2 trillion, up 4% year over year. Retirement sales increased 14%, generating $1.1 billion in net inflows, while wealth management recorded a record $2.7 billion in advisory net inflows.

During the quarter, Equitable selected the board of directors for the new company and named the top 500 leaders for the organization, Pearson explained, “so that we can hit the ground running in January.”

Corebridge CEO Marc Costantini will lead the new Equitable, with Pearson serving as executive chair. Equitable and Corebridge, which also held its call with analysts Tuesday morning, are each among the biggest annuity sellers in the American market.

Executives pointed to growing demand for annuities as Americans approach retirement. U.S. retirement assets now exceed $50 trillion, growing at a 7% annual rate over the past decade. Annuity sales have expanded at a 16% compound annual growth rate over five years and are approaching $500 billion annually, the company said.

On a trailing 12-month basis, Equitable and Corebridge generated more than $48 billion of combined annuity sales, Pearson noted, in excess of $10 billion more than the next largest competitor, and represents approximately 10% market share.

“New Equitable will be the only company with a top five position in each major product category, and this breadth makes us critical to distribution partners,” Pearson said. “It also provides flexibility to adapt to changing customer demand trends and pricing conditions.”

Interest rates climb higher

The first questions from analysts during both the Equitable and Corebridge calls dealt with higher interest rates and the impact on annuity sales.

The Federal Reserve maintains its benchmark interest rate at a target range of 3.75% to 4.00% following a quarter-point rate hike on Sept. 16, 2026. That marked the Fed's first rate increase in three years under new Fed Chair Kevin Warsh.

While higher rates often leads to higher lapses, the higher interest rate environment is “good for our business,” said Robin Raju, chief financial officer of Equitable. “There is a balance that you see in these specific scenarios, but nothing that we see that would cause concern at this point in time.”

Chris Filiaggi, interim CFO and chief accounting officer for Corebridge, said the impact of interest rate changes, which could include another rate hike in December, will mostly be felt in 2027.

“You do see base yields in our assets also increasing as we're taking advantage of the higher rate environment and repositioning the portfolio without taking on incremental rate and not giving up yield,” Filiaggi said. “We will continue to take advantage of that.”

Strong annuity sales

Equitable reported $595 million in third-quarter adjusted operating earnings and $1.1 billion in net income. Results included a $37 million prior-period reinsurance accounting benefit and a $20 million shortfall in alternative investment returns.

Corebridge reported third-quarter profit of $1.44 billion. On a per-share basis, the Houston-based company said it had net income of $3.22. Earnings, adjusted for non-recurring gains, were $1.22 per share.

Third-quarter individual retirement sales were $4.5 billion, up 17% sequentially, and "our strongest quarter of the year," Costantini said. Based on preliminary LIMRA data, Corebridge increased market share in both fixed annuities and RILAs.

Last month, Corebridge launched Progressive Trigger, a "first-of-its-kind" index annuity interest-crediting strategy designed to help clients "preserve future growth potential despite a down year."

The product allows eligible interest percentages to accumulate following periods of negative index performance. If the trigger condition is met later in the strategy’s five-year term, the accumulated percentages are combined with the current year’s percentage to determine the interest credit.

An analyst asked the Corebridge CEO whether the insurer is seeing any market impact from the regulatory scrutiny of competitors such as Delaware Life and others. Delaware Life faces federal investigations and class-action lawsuits over a massive reclassification of assets, revealing that the insurer hid billions of dollars in investments tied to its billionaire owner, Mark Walter.

Corebridge's fourth-quarter annuity sales were "very robust" in October, Costantini said. The insurer is tracking the broader impact of the regulatory scene, he added.

"It is nuanced because some distributors obviously have taken action, and then that helps everybody else that is on the shelf," Costantini said. "And you see perhaps some, I would say, transfers and 1035 exchanges, but we have not seen it materially affect ... the volumes that we are reporting at this point."

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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 john.hilton@innfeedback.com. Follow him on Twitter @INNJohnH.