Suneet Kamath • Jefferies Financial Group Inc.

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Executive VP & CFO Edward Spehar explained that the negative unassigned surplus is a technical, not fundamental, issue related to the VA statutory framework and that the company's three-year plan still assumes it will take dividends. President & CEO Eric Steigerwalt added that the company achieves similar benefits through strong reinsurance partnerships and is actively considering its strategy regarding alternative asset management.

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CFO Ed Spehar reiterated that the company's three-year plan anticipates dividends from operating companies but declined to provide an annual forecast. CEO Eric Steigerwalt responded that the company's current strategy is designed to produce shareholder value and that management will continue to execute on it, including pursuing strategic initiatives to unlock capital.

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CFO Edward Spehar clarified that 'stable' implies remaining within the target range in normal markets and confirmed the financial plan does contemplate subsidiary dividends after the current year. CEO Eric Steigerwalt addressed the complexity question, acknowledging the challenges but emphasizing the company's long-term strategy to create shareholder value, citing the repurchase of over 50% of shares outstanding as evidence of their commitment to navigating complex periods.

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CEO Eric Steigerwalt confirmed that Brighthouse has hired external resources and new staff in its hedging and finance areas to address the complexity of managing its VA and Shield hedging programs together. CFO Ed Spehar added that the key change going forward is expected to be less strain from new business, which has been the most significant factor in the RBC decline. Regarding buybacks, Steigerwalt noted the company has been opportunistic and maintains a robust capital position at the holding company while continuing repurchases.

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Ramy Tadros, Regional President - U.S. Business, stated that the pressure on the non-medical health ratio was not surprising and expects a significant improvement in the coming quarters. He attributed the Q2 result to a rare instance where multiple smaller product lines moved adversely at once, rather than a macro trend. CEO Michel Khalaf clarified that Chariot Re is primarily a vehicle to support MetLife's own growth with MetLife-originated liabilities, not for pursuing third-party deals in the near term.

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Ramy Tadros, Regional President - U.S. Business & Head of MetLife Holdings, explained that the pressure on the non-medical health ratio was not due to a surprising macro trend but rather normal fluctuations where several smaller products moved in the same direction. He expects a two-point improvement in the ratio in Q3 and another two points in Q4. Michel Khalaf, CEO, President & Director, clarified that Chariot Re is intended as a vehicle for MetLife's own originated liabilities to enable growth, not to pursue third-party deals in the near term.

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CEO Michel Khalaf clarified that the strong Q1 buyback was to catch up after being restricted in Q4 and that a more measured pace should be expected going forward, with no blackout periods affecting April's activity. Executive Ramy Tadros noted that while extreme volatility can be a distraction, the jumbo PRT plan sponsors MetLife targets are typically well-hedged, so they do not anticipate a significant change to the transaction pipeline.

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Ramy Tadros, Head of U.S. Business, explained that while the market is competitive, it is not irrational, and pricing actions for dental should restore margins in 2025. CEO Michel Khalaf and CFO John McCallion attributed the VNB improvement to a better business mix towards high-return segments like Group Benefits and LatAm, capital optimization, and unit cost improvements, confirming it points to an upward ROE trend.

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CEO Glenn Williams and CFO Tracy Tan both stated that the P&L impact is minimal, as profitability across products is similar over the long term, with the main difference being compensation timing. Williams emphasized that Primerica works with a narrow shelf of high-quality partners who avoid market "excesses," and a committee vets all products for suitability.

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CEO Glenn Williams clarified that 'resistance' refers to a new customer objection stemming from economic uncertainty, which is a difficult hurdle for salespeople, particularly new ones. He noted this 'wait-and-see' attitude also affects some potential recruits. Regarding costs, Williams stated that while ISP momentum has slowed from Q1 levels, April was still strong with no 'cliffs in sight.' He emphasized that Primerica runs a lean organization, and while a cost-reduction plan exists, it is not a primary focus at this time.

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CEO Glenn Williams explained there is a natural lag in new agent productivity and that improving it is a key focus for 2025. He described the 3% growth guidance as a conservative 'reverting to the mean' after a strong 2024. He also confirmed Primerica sells index-linked variable annuities, with its sales mix shifting towards that product in line with industry trends.

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CEO Glenn Williams attributed the annuity sales strength to attractive product features, an aging client base shifting to decumulation, and improved rep effectiveness, confirming that partners are acting rationally. CFO Tracy Tan stated that the $425 million share repurchase authorization for 2024 has been completed, with a 2025 program to be discussed soon.

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EVP & CFO Michael Katz reiterated Voya's cautious view on the 2025 stop-loss block, stating it is too early to confirm if claims trends are matching pricing assumptions. On participant behavior, CEO & Director Heather Lavallee noted that previously heightened surrender activity has started to normalize in 2025. She also highlighted favorable trends in transfers to fixed accounts and uptake in products utilizing the general account, which helps moderate outflows. CEO - Workplace Solutions Jay Kaduson added that plan retention remains strong at 97%.

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CFO Michael Katz confirmed the actions are a deliberate business strategy to increase customer value. CEO Heather Lavallee clarified the 'macro' concern is tied to potential unemployment increases, which can drive higher benefit usage, not market volatility. Katz added that the reserve strengthening was a precautionary measure, not a reaction to current trends, and that the additional IBNR will be held through Q3, pending a Q4 review of actual utilization.

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CEO Heather Lavallee noted that participant surrender rates improved in Q4 but the company remains cautious for 2025. Regarding in-plan annuities, she explained that while Voya has existing capabilities and partnerships, it is an area of strategic focus for future development. She indicated that more details would be shared by the new head of Workplace Solutions in coming quarters, describing it as a 'stay tuned' situation.

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CEO Heather Lavallee explained it's a combination of two factors: Voya-specific underpricing of the 2024 book and a broader industry issue of elevated claim costs due to inflation. Executive Rob Grubka described OneAmerica's recent flow story as "more complicated," with plan retention in the low 90s, but noted Voya is focused on leveraging new relationships and capabilities to drive future growth.

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CFO Don Cummings clarified that the new RILA product remains capital-light and its principal protection feature, while new for Jackson, is offered by competitors. He stressed that Jackson manages its VA and RILA blocks separately, although a natural equity risk offset creates some hedging efficiency. Cummings also confirmed that the BrookRe structure could be leveraged for M&A to acquire complementary business blocks, thereby accelerating diversification and growing free cash flow.

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CEO Laura Prieskorn stated that any potential acquisition would be evaluated against the value of share buybacks or balance sheet strengthening. On spread products, she emphasized a disciplined approach but openness to new strategies. CFO Don Cummings added that RILA is a key spread product seeing success without a formal partnership. Scott Romine, President of Jackson National Life Distributor, explained that growth in the fee-based channel is driven by providing adviser choice, building out financial planning tools, and the expansion of the RIA space.

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CFO Don Cummings stated that Jackson reviews Brooke Re disclosures quarterly and will share information on capital movements and provide a year-end summary, emphasizing its long-term, self-sustaining nature. Regarding capital return, he reiterated the company's "earn it and pay it" philosophy, noting the need for a capital buffer for market sensitivity and ongoing regulatory discussions. He suggested the high RBC ratio would likely decrease gradually over time rather than through a single large action.

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CFO Don Cummings clarified that 2024 distributions were unique due to the initial funding of Brooke Re. He noted that while he anticipates an increase in capital return for 2025, future distributions will depend on business performance. Cummings confirmed RILA is priced on a stand-alone basis without VA diversification benefits. He also stated that basis risk has been modest year-to-date due to a rigorous approach to fund management and the use of multiple hedging indices.

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CFO Robin Raju clarified that RILA profitability is driven more by the 10-year Treasury, volatility, and corporate spreads rather than short-term rates, with pricing consistently targeting a 15% IRR. He and Nick Lane, President of Equitable, confirmed that products sold through their affiliated wealth management channel exhibit better persistency and higher margins.

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Nicholas Lane, President of Equitable Financial, confirmed robust sales in April, stating that research shows 70% of people are concerned about volatility's impact on retirement assets. CEO Mark Pearson added that Equitable's "all-weather" product portfolio, including RILAs for capital protection and income solutions, is an advantage in the current environment.

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Nicholas Lane, President of Equitable Financial, and CEO Mark Pearson confirmed annuity growth is from both a 15% increase in policy count and higher balances, supported by strong market fundamentals. CFO Robin Raju explained the excess capital will be deployed in a disciplined, year-over-year manner to fund growth and shareholder returns, not through a large one-time action.

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Mark Pearson, President and CEO, attributed the sales strength to peaking demographics of retirees and heightened product awareness, with the main risk being a significant drop in interest rates. Nicholas Lane, President of Equitable Financial, affirmed the company's intentional focus on the RILA segment, where its integrated business model provides a competitive advantage, noting the significant opportunity from assets moving out of 401(k) plans.

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An Aflac executive clarified that the company uses the regulatory ESR model with undertaking-specific parameters (USP), which adds about 30 points and is believed to be more realistic for their business. The executive also stated that lapse-reissue activity for the new cancer product is currently in line with or slightly below internal expectations, while an Aflac Japan executive added the product is successfully targeting both new and existing customers.

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An unnamed executive stated that Aflac uses the regulatory ESR model with USP (undertaking-specific parameters), which they believe is the right approach as it uses risk factors specific to their business. The executive also noted that lapse-reissue activity is in line with or slightly below internal expectations. A representative from Aflac Japan added that the new cancer product is being sold to both new and existing customers, with a special plan for children attracting younger demographics.

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Max Broden, CFO, explained the hedge program is sized to manage a specific amount of risk (around 40-45 ESR points) and that the current ESR is well above target. Virgil Miller, President of Aflac U.S., noted the producer metric was anecdotal and that overall productivity is up. He highlighted a renewed focus on getting veteran agents to sell Aflac's dental product, which saw a 23% sales increase in Q1.

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EVP & CFO Axel André defended the VIF credit, citing a strict review process, conservative assumptions, and receiving less than 50% credit for the value. President & CEO Tony Cheng described the 'Creation Re' strategy as a proactive, innovative, and less risky approach than competing on commoditized business, expressing confidence that the market will eventually recognize the value created.

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CFO Axel Andre explained that favorable results were driven by lower-than-expected large claims, while smaller claims were slightly elevated, consistent with the flu season. Chief Risk Officer Jonathan Porter confirmed the large industry claim was fully reflected in Q1 results. Regarding the Equitable deal, CEO Tony Cheng highlighted its strategic value, while Axel Andre noted RGA's ability to reprice the business using its extensive data and that the deal only increases RGA's total mortality exposure by about 5%. Jonathan Porter added that capital, expense, and asset-side synergies all contribute to the value creation.

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Chief Financial Officer Axel Philippe Andre confirmed the conceptual bridge was a decent way to think about it, noting the prior metric was conservative. President and CEO Tony Cheng described the Japan opportunity as being in the 'early innings,' explaining that clients tend to execute these transactions in tranches over many years, creating a long-term, sustained opportunity rather than a single event.

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President and CEO Tony Cheng emphatically stated the decision was "more than 100%" RGA's, driven by raising retention limits and the block's strong, seasoned performance. CFO Axel Andre added that the capital impact is marginal, increasing mortality exposure by only 1-2%, and is already factored into the current excess capital figure.

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CEO Ellen Cooper attributed strong RILA sales to their second-generation product's unique features and expanded distribution. CFO Chris Nezepore explained that higher RILA outflows are a natural result of the product block aging. Regarding free cash flow, Nezepore expressed confidence in the 45%-60% target for 2026, clarifying that while the Bain capital will boost long-term conversion, its deployment over the next 18 months means the full impact will be realized after 2026.

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Chief Financial Officer Christopher Neczypor stated that issuing new equity directly to Bain Capital was crucial for creating strategic alignment and providing dedicated growth capital to accelerate the company's strategic priorities, particularly the expansion of spread-based products. He acknowledged the annuity ROA is declining due to the mix shift towards RILA and fixed annuities, which have better risk-adjusted returns, but did not provide a specific target for where the ROA would stabilize.

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CFO Chris Neczypor clarified that Alpine's immediate focus is on maximizing capital efficiency for new business, particularly fixed annuities and potentially retail life products, to grow spread-based earnings. Regarding expenses, he noted that the full benefits of 2024 cost actions will materialize in 2025, and while some savings will be reinvested for growth, investors should expect to see improvement in operating margins rather than just a decline in absolute G&A expenses.

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CFO Chris Neczypor stated that free cash flow is tracking above expectations and the company is on target for its 2026 goals, detailing uses of cash like debt repayment and capitalizing its Bermuda subsidiary. CEO Ellen Cooper addressed annuity sales, attributing the strength to favorable demographics and higher interest rates, while emphasizing a strategic focus on profitable growth over sheer volume.

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President of Retirement & Income Solutions, Christopher Littlefield, explained that elevated markets pressure account value net cash flows, though the trend improved from the prior year. He noted stabilization in withdrawals and strong fee-based deposit growth. Regarding rollovers, he and CEO Deanna Strable described a long-term strategy focused on providing advice to participants along their journey, a shift from the previous education-only model.

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CEO Deanna Strable and Executive Amy Friedrich confirmed the SMB market remains resilient, citing a recent survey showing businesses are focused on supply chain and pricing adjustments rather than cutting benefits or staff. On withdrawals, Executive Christopher Littlefield confirmed that just as rising markets increase the dollar value of withdrawals, falling markets would have the converse effect, reducing the nominal amount. He reiterated the business is run for revenue and profit, not flows.

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CEO Deanna Strable affirmed that her M&A philosophy is consistent with the past, stating that while the company is inquisitive about opportunities, the bar for deals is high and M&A is not required to meet financial targets. She noted PFG has the capacity for a larger deal if it met all strategic, financial, and cultural criteria. President of Retirement and Income Solutions Christopher Littlefield described in-plan annuities as promising, especially when packaged in target-date funds, but noted that participant utilization is still in its early days despite growing plan sponsor adoption.

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Executive Christopher Littlefield explained that about 75% of the increase in participant withdrawal amounts was driven by higher average account values from strong market performance, with only 25% due to a slight uptick in the withdrawal rate. He noted they retain a 'significant portion' of assets post-benefit event and are developing new retirement income solutions for 2025. CEO Dan Houston added that retained assets generate economics across various Principal business units.

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CEO Gary Bhojwani confirmed CNO faces no material risk from its Medicare Advantage distribution, citing diversification across approximately 20 carriers. He also noted there was nothing unusual in the record annuity sales, attributing them to strong momentum and low policy churn. CFO Paul McDonough added that annuity spreads have remained stable both sequentially and year-over-year.

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CEO Gary Bhojwani acknowledged potential quarterly fluctuations but expects year-over-year and full-year growth in agent count. He stated that while not immune to a recession, demand for CNO's products is resilient due to fundamental needs like the 11,000 people turning 65 daily and rising medical costs, citing strong performance through the recent pandemic and inflation.

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CFO Paul McDonough clarified the tech initiative is an investment to enable long-term growth, not a cost-saving play. He explained that while most costs will be classified as non-operating, all guidance metrics, including ROE, are inclusive of the full impact. Regarding Bermuda, McDonough stated he does not foresee saturation being an issue, describing it as an efficient market with a regulatory regime that has significant capacity for growth.

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CFO Paul McDonough clarified that the Q4 investment income guidance is a planning convention with some downside risk. Regarding ROE, he stated that efforts focus mostly on the numerator (earnings) but also include optimizing the denominator. CEO Gary Bhojwani added that improving ROE is the management team's top priority, driven by numerous small, specific initiatives across the business rather than a single large action.

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Chairman & CEO James Cracchiolo confirmed that core organic growth is the primary driver of the business. He then gave a robust defense of the company's long-term strategy and success since its IPO, highlighting its top-tier performance, the strength of its diversified model, and its strong brand. He assured that the board is confident in its position and that succession planning is a continuous focus.

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James Cracchiolo, Chairman & CEO, confirmed that organic growth from the existing advisor base is the primary driver, supplemented by recruiting. He expressed strong confidence in the company's long-term strategy, highlighting its track record of high returns and shareholder value creation. He affirmed that the board feels very good about the company's position and that robust succession plans are in place.

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CFO Walter Berman stated that AWM NII should improve due to strategic actions like shifting the portfolio from floating to fixed rates and adding more liabilities to the balance sheet. Chairman and CEO Jim Cracchiolo described the Signature Wealth platform as a comprehensive, state-of-the-art UMA that provides flexibility for advisers to manage various investment models, including those from Columbia Threadneedle, in a streamlined manner.

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Executive Walter Berman explained that the bank is well-positioned for 2025 NII after repositioning its portfolio to be 87% fixed-rate and adjusting client crediting rates. Executive Jim Cracchiolo added that while client cash levels are high due to attractive short-term rates, he expects them to decrease over time as money is redeployed, though not dramatically.

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CEO Jim Cracchiolo explained that the Asset Management team is actively working to introduce more products tailored for the AWM channel to increase flows. He noted the shift to money market funds indicates clients are keeping cash liquid for potential redeployment into longer-duration products like wrap accounts, rather than locking into term CDs.

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CEO Kevin Hogan acknowledged that higher volumes of annuities will exit surrender charge periods, mainly in the second half of 2025, but noted that attractive new business conditions should allow for continued growth of the general account. CFO Elias Habayeb clarified that the post-IPO strategy is to grow earnings to support a 60-65% payout ratio, and they are targeting 5-10% growth in insurance company dividends for the year, with continued growth expected over time.

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CEO Kevin Hogan and CFO Elias Habayeb reiterated that while surrender volumes may rise, strong new business sales are expected to result in continued positive net inflows to the general account in 2025. Regarding fixed annuity sales, Hogan explained that the company prices dynamically on a weekly basis to focus capital on the most attractive risk-adjusted returns, which can cause short-term deviations from industry trends.

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CEO Kevin Hogan stated that underlying demand drivers for annuities remain strong and the 5-10 year part of the yield curve is still supportive of attractive products. CFO Elias Habayeb clarified that a 25 basis point rate cut would impact base yield by less than 2 basis points, an effect that can be mitigated over time, and reiterated confidence in long-term spread income growth despite potential short-term pressure.

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President and CEO Kevin Hogan clarified that after adjusting for one-time items in previous quarters, nominal spreads were sequentially flat. He explained that the cost of funds is increasing as new business is written at higher rates than the lower-cost in-force business that is surrendering. An executive then added that spread income growth is driven by both new business and reinvesting at higher rates, noting the 130 basis point differential between new money and roll-off yields provides a tailwind, meaning record sales levels are not required for continued growth.

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CEO Andy Sullivan defended the go-forward life insurance business as core to Prudential's purpose, capital-efficient, and a source of mortality balance, leveraging brand and underwriting strengths. CFO Yanela Frias noted that while Japan surrenders are stabilizing, they remain a headwind with an estimated $100 million impact to 2025 earnings, and most contracts are past the period for surrender fees. Mr. Sullivan added that they are mitigating this by diversifying products.

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Caroline Feeney-Pfundstein, Head of U.S. Businesses, expressed confidence in annuity sales, citing nine consecutive quarters of growth, strong market tailwinds, and a diversified product portfolio that is capturing a shift towards RILAs. Vice Chairman Rob Falzon added that Prismic has a significant growth opportunity in the underserved Japanese reinsurance market, aided by the new ESR regime, and that the recent internal deal enhances its credibility for pursuing third-party business.

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Andy Sullivan, Head of International Businesses, responded that Prudential does not expect an impact on margins from the product mix shift in Japan and sees a long-term growth opportunity in retirement products. Caroline Feeney, Head of U.S. Businesses, attributed strong U.S. annuity sales to a diversified product portfolio and demographic tailwinds, expressing confidence in the franchise's sustainable outlook.

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Caroline Feeney, Head of U.S. Businesses, acknowledged that while a rate decrease could cause a pullback in fixed annuities, Prudential's broad and diversified product portfolio mitigates this risk. She emphasized that customer demand for protected income remains a long-term driver and that the company can nimbly adjust pricing. Controller and Principal Accounting Officer Rob Axel clarified that the size of the next Prismic deal will be determined by the underlying liabilities, not by capital constraints. Vice Chairman Rob Falzon added that balance sheet optimization is the highest priority for Prismic, followed closely by new business flow and third-party deals.

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CEO Richard McKenney and CFO Steven Zabel cited an expected improvement in the group disability loss ratio, normalization of alternative investment income, a favorable operating expense pattern, and momentum from growth and share repurchases. Chris Pyne, EVP of Group Benefits, added that while exact figures aren't disclosed, a significant portion of new business is tied to tech like leave management, which is expected to lift persistency over time.

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CEO Rick McKenney confirmed that bundling other business lines with an LTC transaction is a possibility and not seen as a constraint. He described the capital required for organic growth as a steady and consistent need, not the largest use of capital. For M&A, he reiterated a focus on smaller, capability-driven transactions in the few hundred million dollar range, rather than large-scale deals, to enhance premium growth.

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CEO Rick McKenney stated that bundling other good returning business lines is a possibility and not a constraint for a potential LTC transaction. He described capital for organic growth as a consistent and manageable use. Regarding M&A, he reiterated a focus on smaller, capability-driven deals rather than large-scale acquisitions, consistent with prior commentary.

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CFO Steven Zabel stated that Unum feels confident in its own experience data and does not anticipate a new industry study would drive changes in its Q4 statutory review. CEO Rick McKenney affirmed that Unum remains actively engaged in risk transfer discussions with multiple counterparties, seeing continued interest, but reiterated that any deal must be at the right price and structure.

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