Brighthouse Financial ((BHF)) has held its Q4 earnings call. Read on for the main highlights of the call.
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Brighthouse Financial’s recent earnings call presented a mixed outlook for the company. While there were significant achievements in sales and strategic initiatives like reinsurance and expense reduction, challenges in statutory results and capital management tempered the optimism. This dual sentiment reflects both progress and hurdles that the company faces as it moves forward.
Record Sales of Shield Product Suite
Brighthouse Financial announced record sales of its flagship Shield-level annuities product suite, reaching $7.7 billion in 2024. This represents a 12% increase compared to the previous year, highlighting strong demand and successful marketing strategies for their annuities products.
Life Insurance Sales Growth
The company also saw a positive trajectory in life insurance sales, which totaled $120 million for the year, marking an 18% rise over 2023. This growth underscores Brighthouse’s effective positioning in the life insurance market and its appeal to consumers.
Successful Reinsurance Transactions
Brighthouse completed reinsurance transactions for various insurance blocks, including fixed and payout annuities, as well as universal life products. These transactions have been instrumental in creating capital efficiencies and reducing the required capital for the company.
Expense Reduction
In a bid to improve financial efficiency, Brighthouse achieved a 7% reduction in full-year corporate expenses compared to 2023. This cost-cutting measure indicates the company’s commitment to maintaining a lean operational structure.
Capital Return to Shareholders
The company repurchased $250 million of common stock in 2024, contributing to a significant reduction in the number of outstanding shares by over 50% since 2018. This capital return strategy underscores Brighthouse’s commitment to enhancing shareholder value.
Statutory Results Disappointment
On a less positive note, Brighthouse faced disappointments in its statutory results for 2024. The complexity of managing its variable annuity and Shield businesses on a combined basis led to strain on these results.
Decline in Total Adjusted Capital
The fourth quarter saw a $300 million decline in Total Adjusted Capital (TAC), which was impacted by significant changes in interest rates and the yield curve, presenting a challenge for the company’s financial stability.
Capital Contribution to BLIC
A strategic capital contribution of $100 million was made to Brighthouse Life Insurance Company to maintain a combined RBC ratio of approximately 400%, managing to stay within the lower end of the target range, showcasing a proactive approach to financial management.
Forward-Looking Guidance
Looking ahead, Brighthouse Financial has provided guidance that reflects both growth and caution. The company reported $10 billion in total annuity sales for 2024, with significant contributions from their Shield product suite. Life insurance sales also showed strong growth. Despite the challenges, Brighthouse aims to maintain expense discipline and shareholder value through continued stock repurchases and strategic capital allocations.
In conclusion, Brighthouse Financial’s earnings call revealed a company navigating both progress and challenges. With record sales in key product areas and strategic efforts to manage expenses and capital, Brighthouse is poised for growth. However, the mixed results in statutory outcomes and capital adjustments remind stakeholders of the complexities inherent in the financial sector.
