Corebridge Financial’s Resilient Q1 Earnings Call Insights

Corebridge Financial, Inc. ((CRBG)) has held its Q1 earnings call. Read on for the main highlights of the call.

Corebridge Financial’s recent earnings call painted a picture of strong financial performance and resilience, despite facing some challenges. The company showcased significant achievements in organic growth and balance sheet management, while also acknowledging the hurdles posed by declining individual retirement income, higher operating expenses, and market volatility. This environment suggests a cautious optimism moving forward.

Strong First Quarter Financial Performance

Corebridge Financial reported impressive operating earnings per share of $1.16 and a return on equity (ROE) of 11.8% for the first quarter. The company returned $454 million to shareholders, maintaining a payout ratio of 70%, underscoring its commitment to shareholder value.

Resilient Balance Sheet

The company’s balance sheet remains robust, with holding company liquidity at $2.4 billion. Corebridge’s investment portfolio is of high quality, boasting an average rating of single A, which speaks to its financial stability and prudent investment strategies.

Organic Growth and Product Expansion

Corebridge reported robust premiums and deposits totaling $9.3 billion, driven by strong demand in individual retirement. The launch of a new RILA product was a highlight, achieving $260 million in sales in its first quarter, indicating successful product innovation and market reception.

Life Insurance and Institutional Markets Growth

The Life Insurance segment delivered strong performance, benefiting from favorable mortality results. Institutional Markets also showed impressive growth, with a 48% year-over-year increase in GIC reserves, reflecting the company’s strength in these areas.

Proactive Balance Sheet and Capital Management

Corebridge continued to enhance capital efficiency by ceding approximately $2 billion in reserves to its affiliated reinsurer in Bermuda. This strategic move is part of the company’s proactive approach to balance sheet and capital management.

Decline in Individual Retirement Adjusted Income

The company faced a 10% year-over-year decline in adjusted pre-tax operating income for individual retirement. This was attributed to short-term impacts from Federal Reserve rate actions and higher DAC and commissions, highlighting areas of concern.

Impact of Market Volatility on Alternative Investments

Market volatility affected Corebridge’s alternative investments, with annualized returns falling $0.06 short of long-term expectations. This was largely due to real estate equity returns, illustrating the challenges posed by market conditions.

Higher General Operating Expenses

General operating expenses rose by 5% year-over-year in the first quarter. While savings were realized, they were offset by costs associated with business growth and higher compensation expenses, indicating an area needing careful management.

Guidance on EPS Growth for 2025

Looking ahead, Corebridge Financial anticipates EPS growth in 2025 to be below the long-term target of 10% to 15%, with expectations set for mid-single-digit growth. This guidance reflects the company’s strategic focus on organic growth, balance sheet optimization, and expense efficiencies to drive long-term value creation.

In summary, Corebridge Financial’s earnings call highlighted a strong start to the year with notable achievements in financial performance and strategic initiatives. While challenges such as market volatility and rising expenses persist, the company’s proactive strategies and focus on growth provide a foundation for cautious optimism moving forward.