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CF

Corebridge Financial, Inc. (CRBG)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 operating EPS was $1.16, up 5% YoY, and above S&P Global consensus of $1.14; APTOI was $810M, down 3% YoY, with core sources of income ex-notables and international up 1% YoY . EPS beat vs consensus: $1.16 actual vs $1.138 consensus.* *
  • Total premiums and deposits were $9.3B, down 12% YoY from a strong prior-year quarter; Group Retirement continued transitioning from spread to fee revenue and Individual Retirement saw strong RILA momentum .
  • Capital return remained robust: $454M returned (including $321M repurchases) and $0.24 dividend declared; holding company liquidity was $2.4B and Life Fleet RBC remained above target .
  • Management maintained long-term targets (EPS growth 10–15%, payout ratio 60–65%, run-rate ROE 12–14%) and updated sensitivities: a 10% S&P move impacts fee/advisory by ~$85M over 12 months; each 25 bps SOFR move impacts base portfolio income by ~2 bps .
  • Key catalysts: accelerating RILA adoption, disciplined asset repositioning to enhance yields, continued Bermuda reinsurance utilization (~$2B reserves ceded in Q1; $14B to date), and clarity on alternative investment return headwinds in Q2 .

What Went Well and What Went Wrong

  • What Went Well

    • Individual Retirement RILA launch gaining traction: ~$260M Q1 sales with broader distribution and CA approval; management views the RILA market positioning as strong .
    • Underwriting margin strength: Life Insurance APTOI +100% YoY; underwriting margin ex-VII +8% YoY (and +11% ex-notables and international) on more favorable mortality .
    • Capital return and liquidity: $454M returned (70% payout ratio), $2.4B holding company liquidity, RBC above target; run-rate ROE 12.3% and long-term ROE target maintained .

  • What Went Wrong

    • YoY APTOI decreased 3% and core sources of income fell 3% including effects from international divestiture and prior-year notable items; excluding these, core sources rose only 1% .
    • Premiums & deposits declined 12% YoY (ex-transactional and international, down 6%): lower fixed annuity deposits in IR and lower out-of-plan deposits in Group Retirement weighed on volumes .
    • Corporate interest expense increased, partly due to pre-funding April 2025 debt maturity, pressuring Corporate & Other APTOI (-$33M YoY) .

Financial Results

MetricQ3 2024Q4 2024Q1 2025
Operating EPS ($)$1.38 $1.23 $1.16
Net Income Attributable to Common ($MM)$(1,184) $2,171 $(664)
Adjusted Pre-tax Operating Income (APTOI) ($MM)$1,031 $878 $810
Adjusted ROAE (%)14.7% 12.8% 11.8%
Premiums & Deposits ($MM)$9,608 $9,860 $9,323
Net Investment Income (APTOI basis) ($MM)$2,834 $2,879 $2,908

Q1 2025 vs Wall Street consensus (S&P Global)

MetricConsensusActualResult vs consensus
Operating EPS ($)$1.138*$1.16 Beat
Revenue ($MM)$5,279.98*$3,711.00*Miss

Values with asterisks retrieved from S&P Global.

Segment APTOI ($MM)

SegmentQ1 2024Q4 2024Q1 2025
Individual Retirement$622 $578 $554
Group Retirement$200 $161 $195
Life Insurance$54 $156 $108
Institutional Markets$112 $133 $137

KPIs and Operating Drivers

KPIQ3 2024Q4 2024Q1 2025
Spread Income (Total) ($MM)$1,038 $990 $1,022
Fee Income (Total) ($MM)$537 $534 $518
Underwriting Margin (Total) ($MM)$417 $388 $346
Holding Co. Liquidity ($MM)$2,000 $2,200 $2,400
Capital Returned ($MM)$848 $527 $454
Dividends per Share ($)$0.23 $0.24 $0.24
Share Repurchases ($MM)$715 $398 $321
Adjusted Book Value/Share ($)$37.32 $39.80 $38.83

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Long-term Operating EPS GrowthLong-term10–15% 10–15% Maintained
FY 2025 EPS Growth vs FY 2024 base ($4.99)FY 2025Mid-single digits from $4.99 base Mid-single digits (unchanged) Maintained
Payout Ratio TargetFY 202560–65% 60–65% Maintained
Run-rate ROE TargetAnnual run-rate12–14% 12–14% Maintained
Equity Market SensitivityNext 12 monthsn/a10% S&P 500 move → ~+$85M/-$85M net impact on fee income/advisory expense Updated
Interest Rate Sensitivity (SOFR)Immediaten/aEach 25 bps SOFR move impacts base portfolio income by ~2 bps (reduced vs prior) Updated
Alternative Investment Returns OutlookQ2 2025n/aQ2 alt returns expected ~half of Q1 level Updated
Dividend DeclarationQ2 2025$0.24 (increased in Q4) Declared $0.24 payable June 30, 2025 Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q-2 and Q-1)Current Period (Q1 2025)Trend
RILA/Product InnovationQ3 2024: Initiated largest product launch (RILA) ; Q4: momentum implied in IR ~$260M RILA Q1 sales; admitted broadly incl. CA; strong positioning Improving
Group Retirement shift to fee incomeQ3: Base spread down; fee income up; APTOI -2% Ongoing transition; net outflows $1.8B; fee business growing; base spread benefited from asset repositioning Ongoing
Base spread income & rate sensitivityQ3: Base spread income up; NII (APTOI) +15% YoY SOFR sensitivity reduced to ~2 bps/25 bps; base spread to grow over time despite earn-in of Fed actions Improving sensitivity
Capital management/Bermuda reinsuranceQ3: pre-funding 2025 maturities; leverage reflects pre-funding ; Q4: RBC 420–430% ~$2B ceded to affiliated reinsurer in Q1; ~$14B total to date; exploring external reinsurance opportunistically Accelerating
PRT pipelineQ3: Institutional Markets APTOI +105% YoY; PRT/GIC reserves growth Promising U.S./U.K. pipeline; volatility not expected to materially alter timing Stable to positive
Digital/automation/AIQ3/Q4: AI cited among industry risks ; Investing in digital and automated underwriting; exploring AI to improve scalability and efficiency Building
Liquidity/cash generationQ3: Holding co. liquidity $2.0B ; Q4: $2.2B and 10% dividend increase from subsidiaries $2.4B liquidity (incl. $1B pre-funding); $600M subsidiary distributions; payout ratio on track Strong/maintained

Management Commentary

  • “Corebridge reported operating earnings per share of $1.16 and ROE of 11.8%. We also returned $454 million to shareholders delivering a payout ratio of 70%.” — Kevin Hogan, CEO .
  • “Adjusting for notable items and alternative investment returns, we delivered run rate operating EPS of $1.21 and adjusted ROE of 12.3%.” — Elias Habayeb, CFO .
  • “We are well positioned in the fast-growing RILA market given our strong product, broad reach and long tenured relationships.” — Kevin Hogan .
  • “Given recent increased volatility, we are providing updated sensitivities… each 25 bps move in SOFR impacts base portfolio income by approximately 2 bps… a 10% change in the S&P 500 has an ~$85 million impact over the first 12 months.” — Elias Habayeb .

Q&A Highlights

  • Asset repositioning and yields: Management opportunistically sold lower-yielding bonds and reinvested across public/private credit to improve ROE within risk parameters; Group Retirement base spread improved sequentially, but long-term trend is toward fee income .
  • Demand and competition: Annuity demand remains robust; index products strong; pricing remains rational with attractive new business margins; fixed annuity sales showed episodic softness but conditions remain attractive .
  • Bermuda reinsurance strategy: ~$2B reserves ceded in Q1; ~$14B to date; early in the strategy with further opportunities across in-force and new business; external reinsurance evaluated only if accretive .
  • Surrenders: Higher volumes exiting surrender periods expected mainly in H2; surrender dynamics align with yields/spreads; focus remains on net general account growth via attractive new business pricing .
  • Expense seasonality and voluntary early retirement: Q1 expenses elevated due to seasonality (rule of 65 equity grant expense, payroll taxes/401k matches); early retirement program ~ $85M one-time cost; expected to lower run-rate expenses over time, partly reinvested .
  • Portfolio credit resilience: 95% investment-grade fixed maturities, single-A average rating, diversified exposures with covenants for private placements and senior tranches in structured products; conservative reserving and strong RBC buffer .

Estimates Context

  • EPS: CRBG beat S&P Global consensus ($1.16 vs $1.138), supported by fee income growth, improved underwriting margin, and asset repositioning; notable items had a +$0.01 impact . Consensus and actual from S&P Global.*
  • Revenue: Reported revenue (S&P Global actual) was $3.711B vs $5.280B consensus, a miss; note insurer revenue comparability can be affected by reinsurance and non-GAAP adjustments (CRBG also reports adjusted revenues by segment totaling $4.736B) . Consensus and actual from S&P Global.*

Values with asterisks retrieved from S&P Global.

Key Takeaways for Investors

  • Operating EPS outperformed consensus despite modest YoY APTOI decline; underwriting strength and fee income supported results while corporate interest costs and earn-in of Fed actions were headwinds .
  • RILA momentum is a tangible growth driver; management expects spread income to grow over time as new money yields remain ~100 bps over roll-off and asset repositioning opportunities persist .
  • Group Retirement’s structural shift to fee income continues; near-term net outflows are consistent with guidance, but advisory/brokerage AUMA growth and productivity investments should support future earnings mix .
  • Capital return remains a core pillar: $454M returned and $0.24 dividend declared; payout ratio target of 60–65% maintained, supported by strong liquidity and RBC .
  • Updated sensitivities frame macro risk: equity markets (~$85M per 10% S&P move) and rates (~2 bps per 25 bps SOFR) with reduced floating-rate exposure, helping navigate volatility .
  • Bermuda reinsurance and potential external transactions can enhance capital efficiency; management will pursue only risk-adjusted accretive structures .
  • Near-term watch items: Q2 alternative returns expected ~half of Q1; monitor PRT pipeline execution and surrender activity in H2, alongside continued RILA adoption .

Additional notes:

  • Q1 2025 8-K 2.02 was read in full; Q1 2025 earnings call transcript read in full; no other Q1 2025 press releases found beyond the furnished 8-K press release – –.
  • Prior two quarters’ earnings releases (Q3 and Q4 2024) were read in full for trend analysis – –.