RILA sales leader Equitable Holdings races to meet lifetime income demand

Equitable Holdings continues to tinker with a formula combining retirement products, wealth strategies and asset management.

All three came up winners in 2024, with full-year inflows of $7.1 billion, $4 billion and $4.3 billion, respectively.

In the retirement sector, Equitable is lengthening its sales lead in the popular registered indexed-linked annuity category. The insurer is credited with creating the RILA concept – in which losses are capped in exchange for a chance to earn a greater market return – in 2010.

The latest LIMRA sales figures show Equitable selling more than $10.5 billion worth of RILAs through the third quarter. Equitable is selling roughly 22% of all RILAs.

Equitable executives met with Wall Street analysts Thursday to discuss its financial results.

“We are the pioneer in that market,” said Nick Lane, head of retirement, wealth management & protection solutions. “In recent years, we've introduced new strategies like dual direction and added new indices. This year we will enhance our core SCS [Structured Capital Strategies] and SCS income products. We see rising consumer demand for lifetime income solutions and Equitable is well situated to meet this need.”

Lane noted that Equitable benefits from a strong distribution network. New policy counts increased roughly 15% in 2024 and annual policy size up more than 13% in the same period.

Lane referenced Cerulli Associates' data in citing the retirement market’s untapped potential.

“There's roughly $600 billion of flows coming out of 401(k)s in 2024 and these are going into new retirement solutions and wealth management offers,” Lane explained. “We remain bullish about the retirement market. We've doubled volumes with record sales over the last three years.”

An analyst asked Equitable executives about the potential sale of a “big RILA competitor,” an apparent reference to reports that Brighthouse Financial is pursuing a buyer.

“It wouldn't be new to us if somebody else bought a platform,” said CEO Mark Pearson. “One of the things we'd point to, is with our distribution model, we don't just rely on wirehouses or third parties. We have Equitable Advisors. It's a strong, stable source of revenue flows for us, and that's a competitive advantage we have.”

In Other News

New reinsurer. In January, Equitable established a new Bermuda reinsurance subsidiary, said Robin Raju, chief financial officer.

“The entity provides us optionality and could be used to reinsure inforce liabilities and or new business,” Raju told analysts. “The Bermuda framework aligned well to our internal economic framework and will support us in generating consistent cash flows.”

Quarterly Snapshot

• Reported a 29% year-over-year increase in full-year non-GAAP operating earnings per share, reaching $5.93.
• Assets under management and administration increased by 10% year-over-year, surpassing $1 trillion.
• Generated $1.5 billion in cash flow to the holding company, with over 50% coming from asset and wealth management businesses.
• Achieved $100 million in run rate expense savings and is on track to meet or exceed a $150 million target by 2027.

Management Perspective

“The regulatory support has been very favorable for the industry, where you see strong bipartisan support for Secure Act, etcetera. It does fluctuate with some of the interest rates and equity markets, but the tide is very much in favor of the of the industry. It's very good market to be in.”

CEO Mark Pearson on the attractiveness of the retirement market

By The Numbers

• Total Revenues: $3.6 billion ($2.2 billion in Q4 2023)
• Operating earnings: $522 million ($476 million in Q4 2023)
• Earnings Per Share: Adjusted after-tax income per diluted share was $1.57 ($1.33 in Q4 2023)
• Share Repurchases: $260 million in Q4 2024
• Dividend Declared: $75 million in Q4 2024
• Stock Price Movement: Shares at $53.35 at midday Friday, up 2.1%

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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.