Executive Summary

Q4 2024 delivered resilient operating performance amid rate-driven spread headwinds: Adjusted pre-tax operating income was $878M and operating EPS was $1.23; GAAP diluted EPS swung to $3.80 on favorable realized items and MRB marks . Fee income and underwriting margin supported core sources; base spread income softened sequentially consistent with management’s SOFR sensitivity .
Capital return accelerated: The Board increased share repurchase authorization by $2B and raised the quarterly dividend to $0.24 per share, with $527M returned in Q4 ($398M buybacks, $129M dividends); holding company liquidity ended Q4 at $2.2B and Life Fleet RBC at 420–430% .
Management reiterated long-term run-rate EPS growth of 10–15% on average, but guided 2025 below 10% given near-term spread pressures from rate cuts; insurance subsidiary dividends expected to increase 5–10% in 2025 .
Strategic execution continued: RILA launch broadened the product suite; Bermuda affiliate reinsurance ceded ~$12B reserves to date to enhance financial flexibility; alternative investments expected to recover toward 8–9% long-term returns in H2 2025 .
Stock reaction catalysts: Dividend hike and $2B buyback authorization; clarity on 2025 EPS growth “lighter than 10%”; spread income reset dynamics and fee/underwriting strength; durable capital levels (RBC 420–430%, $2.2B holdco liquidity) .

What Went Well and What Went Wrong

What Went Well

Fee income and underwriting margin growth: Fee income improved 10% YoY and underwriting margin increased 22% on a comparable basis, offsetting spread headwinds . “Core sources of income, excluding notable items, grew 4% year-over-year” .
Capital return and authorization expansion: Returned $527M in Q4 and announced an additional $2B repurchase authorization plus a dividend increase to $0.24 per share, underscoring confidence in financial strength .
Life Insurance strength: Q4 APTOI rose 97% YoY, with underwriting margin excluding VII up 6% YoY (25% excluding sales/notables), driven by favorable mortality; management set a quarterly run-rate for Life APTOI at ~$110–$120M outside seasonal Q1 .

What Went Wrong

Base spread income pressure: Sequential decline aligned with rate cuts and floater resets; Individual Retirement base spreads fell 18 bps QoQ, largely from 2024 cuts and reduced floating-rate exposure .
Group Retirement outflows: Premiums and deposits fell 22% YoY on lower out-of-plan annuity deposits; net outflows tied to older cohorts and RMD seasonality; APTOI decreased 10% YoY .
Institutional Markets mixed: APTOI up 43% YoY aided by VII, but core sources decreased 9% YoY (–6% excl. notables) on slightly lower base spread income and underwriting margin .

Financial Results

Consolidated Trends vs Prior Periods

Metric	Q2 2024	Q3 2024	Q4 2024
Total Adjusted Revenues ($USD Millions)	$4,176	$4,533	$5,016
APTOI ($USD Millions)	$859	$1,031	$878
Operating EPS ($)	$1.13	$1.38	$1.23
GAAP Diluted EPS ($)	$0.59	$(2.02)	$3.80
Net Investment Income (APTOI basis) ($USD Millions)	$2,716	$2,834	$2,879
Premiums & Deposits ($USD Millions)	$11,679	$9,608	$9,860
Adjusted ROAE (%)	12.0%	14.7%	12.8%

Notes:

Q4 GAAP EPS strength reflects favorable realized items and MRB marks; operating EPS isolates recurring drivers .
Sequential spread pressure consistent with management’s fed rate cut sensitivity .

Segment Breakdown (APTOI)

Segment APTOI ($USD Millions)	Q3 2024	Q4 2024
Individual Retirement	$657	$578
Group Retirement	$188	$161
Life Insurance	$156	$156
Institutional Markets	$154	$133
Corporate & Other	$(126)	$(152)
Total Corebridge	$1,031	$878

KPIs and Income Mix

KPI ($USD Millions unless noted)	Q2 2024	Q3 2024	Q4 2024
Spread Income (Total)	$1,002	$1,038	$990
Fee Income (Total)	$514	$537	$534
Underwriting Margin (Total)	$329	$417	$388
Holding Company Liquidity ($)	$1.9B	$2.0B	$2.2B
Life Fleet RBC Ratio (%)	Above target	Above target	420–430%
Capital Returned in Quarter ($)	$575M	$848M	$527M

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Quarterly Dividend	Q1 2025 (payable Mar 31, 2025)	$0.23/share (Q3 2024)	$0.24/share	Raised
Share Repurchase Authorization	Ongoing	Not specified	Increased by $2B	Raised
Long-term Run-rate EPS Growth	Multi-year	Not explicitly stated	10–15% average; non-linear	Formalized target
2025 EPS Growth	FY 2025	Not specified	Below 10% given rate-cut earn-in	Introduced (lighter year)
Insurance Subsidiary Dividends	2025	Not specified	Increase 5–10%	Introduced
Payout Ratio Target	2025	60–65%	60–65% maintained	Maintained
Life Fleet RBC	Ongoing	≥400% target	420–430% estimated end-2024	Above target, reaffirmed

Earnings Call Themes & Trends

Topic	Previous Mentions (Q2, Q3 2024)	Current Period (Q4 2024)	Trend
Interest rate sensitivity & spreads	SOFR cut sensitivity <2 bps per 25 bp; macro hedges; floater exposure ~8% GA portfolio; sequential spread decline from hedging/prepayments	Spread pressure from 2024 cuts; IR base spreads –18 bps QoQ from resets; floater exposure reduced to ~6%	Near-term headwind; mitigation via hedging and crediting actions; expected to earn through
Expense efficiency (Corebridge Forward)	~$320M earned-in; next phase digitization/automation; top-quartile expense ratio	$350M earned-in to date; remaining $50M to earn during 2025; further digitization in finance/actuarial	Ongoing, incremental savings
Product breadth (RILA launch)	Largest product launch, RILA added; distribution partners enabled day 1	>$90M of RILA applications by year-end; momentum building with major partners activating in Q1 2025	Expanding adoption
Capital & reinsurance (Bermuda)	Strategy progressing; leveraging Bermuda capital to support new business	~$12B reserves ceded; further in-force/new business sessions; evaluating external reinsurance	Expanding toolkit
Fee/advisory growth (Group Retirement)	Advisory & brokerage AUA +22%; fee income growing; expected Q4 seasonal outflows	Advisory/brokerage sales +31% YoY; net outflows $3.5B driven by RMDs and plan exits; outlook for steadier flows in Q1	Fee-based mix rising
Alternative investment returns	Q3 ~7% annualized; improving trend; Q4 expected between Q2 and Q3; LT 8–9%	Q4 slightly below LT; 2025 recovery toward 8–9%, stronger H2	Improving to LT range

Management Commentary

“Our Board of Directors increased the existing share repurchase authorization by $2 billion and increased the quarterly dividend to $0.24 per share...” .
“As we look ahead, we expect our annual run rate EPS to increase on average in the range of 10% to 15%… Based on current expectations for short-term interest rates, we may see some pressure during the year…” .
“Core sources of income, excluding notable items, grew 4% year-over-year, driven by increases in fee income and underwriting margin.” .
“We estimate our life fleet RBC ratio to be in the range of 420% to 430% as of the end of 2024.” .
“By year-end, we added both in-force and new business for structured settlements and term life… ceded just over $12 billion of reserves to our affiliate in Bermuda.” .

Q&A Highlights

Base spread reset mechanics: Majority of IR base spread compression driven by floater resets after 100 bps of rate cuts; expected to earn through in ~2 quarters; sequential impact ~$30M and ~18 bps in IR .
2025 EPS growth: Management clarified EPS growth will be less than 10% in 2025 (normalize for notable items and VII), but maintains multi-year 10–15% run-rate EPS growth target .
Cash generation and Bermuda: Bermuda provides flexibility to support new business, potential in-force transactions, and eventually third-party capital; supports dividend growth despite spread pressures .
Life run-rate: Quarterly APTOI run-rate ~$110–$120M excluding seasonal Q1 (+$15–$20M mortality) .
RILA trajectory: >$90M applications by year-end; larger partners and key states onboarding in early 2025 .
Group Retirement flows: Q4 outflows (~$3.5B) tied to RMDs and planned exits, mostly mutual fund assets; fee mix rising mitigates earnings impact .
Blackstone portfolio: ~$69B managed with Q3 originations just under $4.5B at coupons just under 6.6% .

Estimates Context

Wall Street consensus (S&P Global) for Q4 2024 EPS and revenue was unavailable at time of analysis due to SPGI rate limit. Therefore, no beat/miss vs consensus can be determined today. Management-guided context suggests 2025 EPS growth will be below 10% as rate-cut impacts earn through; fee and underwriting strengths plus variable investment normalization and capital management expected to support medium-term trajectory .

Key Takeaways for Investors

Near-term spread headwinds are transitory and rate-reset driven; diversified income (fee/underwriting) and active ALM/hedging mitigate and should support recovery in H2 2025 as resets earn through .
Capital return remains robust with a dividend increase to $0.24 and a $2B repurchase authorization expansion; payout ratio target 60–65% maintained .
Life Insurance earnings quality improved on favorable mortality and product mix; quarterly run-rate ~$110–$120M outside seasonal Q1 .
RILA adds growth optionality and margin diversity; strong early application volume and broader distribution activation in 2025 should sustain sales momentum .
Bermuda affiliate reinsurance enhances financial flexibility for new business and potential in-force transactions; management also evaluating external reinsurance opportunities .
Fee/advisory growth in Group Retirement continues to shift the mix to capital-light revenue; seasonal outflows and cohort dynamics manageable .
Trading lens: Dividend/buyback news and clarity on 2025 “lighter than 10%” EPS growth are likely near-term stock drivers; medium-term thesis centers on spread normalization, fee/underwriting resilience, and disciplined capital deployment .

Corebridge Financial, Inc. (CRBG)·Q4 2024 Earnings Summary