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American National Group Inc. (ANG-PA)·Q4 2024 Earnings Summary

Executive Summary

  • The company did not furnish a Q4 2024 8‑K Item 2.02 or an earnings call transcript in the filing set reviewed; available Q4-period disclosures were limited to preferred dividend declarations and capital actions. Series A and Series B preferred dividends (equivalent to $0.371875 and $0.4140625 per depositary share) were declared for payment on December 1, 2024 .
  • Trailing performance into Q4: total revenue reached $2.004B in Q3 2024 (+59% YoY) while net loss to common was $299M on sizeable mark-to-market impacts and MRB/derivative fair‑value changes .
  • Operating momentum remained robust on a non‑GAAP basis: Distributable Operating Earnings rose to $360M, with annuity net investment spread of $404M in Q3 .
  • Sales strength continued: gross annuity sales were $4.132B in Q3 (+26% QoQ), led by fixed index and fixed rate products; PRT added $289M .
  • Capital structure actions: the Series A preferred reset to 8.571% effective December 1, 2024 , and on January 7, 2025 ANGI agreed to issue $300M of new Series D preferred to redeem the Series A (no over-allotment; NYSE listing application “ANG PRD”) .

What Went Well and What Went Wrong

What Went Well

  • Non‑GAAP operating performance strengthened: Distributable Operating Earnings (DOE) rose to $360M in Q3, with pre‑tax DOE of $432M and annuity spread of $404M, reflecting strong investment income and disciplined liability costs .
  • Annuity sales momentum: Total gross annuity sales reached $4.132B in Q3 (+26% QoQ; +159% YoY), with fixed index sales of $2.027B and fixed rate sales of $1.799B .
  • Management emphasized supplemental non‑GAAP measures to enhance understanding of profitability drivers: “Management believes the use of these non‑GAAP measures…provides information that may enhance a user’s understanding of our results of operations and the underlying profitability drivers of our business” .

What Went Wrong

  • GAAP net results pressured by market dynamics: net loss to common of $299M in Q3 (vs. +$244M in Q2 and +$229M in Q4 2023), driven by investment‑related losses and significant fair‑value changes in insurance-related derivatives and MRBs .
  • Derivative/MRB volatility: Q3 reflected large negative embedded derivative and MRB marks (e.g., indexed annuity embedded derivative −$527M; funds withheld embedded derivative −$199M) contributing to the loss .
  • Asset credit watchpoint: non‑performing mortgage loans increased to $290M by September 30, 2024 (3% of total), warranting attention as the mortgage book scaled materially YoY .

Financial Results

Revenues and Net Income (GAAP)

MetricQ3 2023Q4 2023Q1 2024Q2 2024Q3 2024
Total Revenue ($USD Millions)$1,264 $1,506 $1,670 $2,115 $2,004
Net Income (Loss) to Common ($USD Millions)$54 $229 $113 $244 $(299)

Note: Q4 2024 GAAP results were not furnished in the filings reviewed.

Pre‑Tax Distributable Operating Earnings by Segment

Segment ($USD Millions)Q3 2023Q4 2023Q1 2024Q2 2024Q3 2024
Annuity$95 $80 $105 $291 $404
Life$63 $52 $57 $56 $52
Property & Casualty$(8) $73 $49 $(10) $27
Corporate & Other$17 $(28) $14 $(27) $(51)
Total Pre‑Tax DOE$167 $177 $225 $310 $432
Tax Expense$(27) $(1) $(26) $(57) $(72)
DOE$140 $176 $199 $253 $360

Annuity Investment Spread Components

Component ($USD Millions)Q3 2023Q4 2023Q1 2024Q2 2024Q3 2024
Non‑GAAP Net Investment Income$255 $274 $282 $740 $1,021
Cost of Funds$160 $194 $178 $449 $616
Total Net Investment Spread$95 $80 $105 $291 $404

KPI: Gross Annuity Sales

KPI ($USD Millions)Q3 2023Q4 2023Q1 2024Q2 2024Q3 2024
Fixed Index (Retail)$184 $119 $167 $1,483 $2,027
Fixed Rate (Retail)$1,245 $242 $695 $1,522 $1,799
Variable (Retail)$17 $3 $16 $14 $17
Total Retail Annuities$1,446 $364 $878 $3,019 $3,843
Pension Risk Transfer (PRT)$148 $308 $671 $273 $289
Total Gross Annuity Sales$1,594 $672 $1,549 $3,292 $4,132
Net Annuity Sales$1,594 $672 $1,549 $3,267 $4,122

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Series A Preferred Dividend per Depositary ShareQ4 2024 (payable Dec 1, 2024)Regular scheduled quarterly dividend$0.371875 declaredMaintained
Series B Preferred Dividend per Depositary ShareQ4 2024 (payable Dec 1, 2024)Regular scheduled quarterly dividend$0.4140625 declaredMaintained
Series A Preferred Rate ResetEffective Dec 1, 20245.95% Fixed‑Rate ResetReset to 8.571% until next reset dateReset executed
Series D Preferred (ANG PRD) Issuance & Use of ProceedsAnnounced Jan 7, 2025N/A$300M issued; proceeds to redeem Series ACapital issuance/Redemption plan

No formal revenue/expense margin guidance was furnished in Q4 filings reviewed.

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 2024, Q3 2024)Current Period (Q4 2024)Trend
Reinsurance program (RGA life block)New coinsurance with RGA (~$3.4B reserves; deferred gain $1.6B) executed July 1, 2024 No new reinsurance disclosures in Q4 filings reviewedStructural risk transfer; stable through Q4
Annuity sales momentumRapid scaling across fixed index/fixed rate; Q2–Q3 step-up to $3.292B → $4.132B gross Continued dividend actions; no new Q4 sales disclosed in filings reviewedStrong into Q3; Q4 sales not furnished
Derivative/MRB marksSignificant Q3 negative marks on embedded derivatives/MRBs No Q4 mark disclosures furnishedVolatility watch; pending Q4 reporting
Mortgage loans & creditMortgage loans grew to $11.866B with non‑performing at $290M as of 9/30/2024 No Q4 update furnishedPortfolio scaled; credit metrics need monitoring
Capital structure & preferredsSeries A reset to 8.571% (Dec 1, 2024) Series D offering announced to redeem Series A Transition to new preferred stack

Management Commentary

  • “Management believes the use of these non‑GAAP measures together with the relevant US GAAP measures provides information that may enhance a user’s understanding of our results of operations and the underlying profitability drivers of our business.”
  • “Certain financial data included in this exhibit consists of non‑GAAP financial measures…users are cautioned not to place undue reliance on any non‑GAAP financial measures included in this exhibit.”

Q&A Highlights

No Q4 2024 earnings call transcript was furnished among filings reviewed; no Q&A content available in the document set.

Estimates Context

Wall Street consensus estimates (S&P Global/Capital IQ) for Q4 2024 (EPS and revenue) were unavailable in our toolset for ANG‑PA due to missing coverage mapping; no estimate comparison can be provided.

Key Takeaways for Investors

  • Non‑GAAP operating momentum remains strong despite GAAP volatility: Q3 DOE of $360M and annuity spread of $404M point to healthy core economics even as fair‑value marks pressured GAAP net income .
  • Annuity franchise scaling rapidly: Q3 gross annuity sales of $4.132B, led by fixed index ($2.027B) and fixed rate ($1.799B), support future spread earnings capacity .
  • Watch fair‑value sensitivity: sizable Q3 embedded derivative/MRB marks (e.g., indexed annuity embedded derivative −$527M; funds withheld −$199M) underline earnings sensitivity to markets heading into Q4 .
  • Mortgage loan growth with rising non‑performers: portfolio expanded to $11.866B, but non‑performing loans at $290M warrant continued credit oversight .
  • Capital actions reshape preferred stack: Series A reset to 8.571% effective Dec 1, 2024, followed by Series D issuance to redeem Series A—expect changes in preferred dividend run‑rate and investor base dynamics .
  • Reinsurance program provides balance sheet flexibility: July 2024 RGA transaction (coinsurance on ~half the life block; $1.6B deferred gain) supports capital and risk management into 2025 .
  • Near‑term focus: await Q4 GAAP results and any updated sales/DOE disclosures to gauge trajectory post Q3 momentum and market‑driven marks .