F&G Annuities & Life Inc ((FG)) has held its Q4 earnings call. Read on for the main highlights of the call.
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In the recent earnings call, F&G Annuities & Life, Inc. showcased an impressive performance for 2024, highlighting record sales and an increase in assets under management (AUM). The company demonstrated robust growth in its retail channels and pension risk transfer segments. Despite facing challenges such as decreased funding agreements and compression in fixed income yield, the overall sentiment remained positive, with a strong focus on continued growth and strategic execution.
Record Sales and AUM
F&G Annuities & Life, Inc. reported record gross sales of $15.3 billion for the full year 2024, marking a 16% increase from 2023. The assets under management reached a record $65.3 billion, representing a 17% increase over the fourth quarter of 2023. These records highlight the company’s strong market position and effective growth strategies.
Strong Performance in Retail Channels
Retail channel sales reached a record $12 billion for 2024, showing a 20% increase from the previous year. The company noted record sales in Fixed Indexed Annuities (FIA), Multi-Year Guaranteed Annuities (MYGA), and Indexed Universal Life (IUL) products while maintaining high service levels.
Pension Risk Transfer and Institutional Markets Success
The company achieved record pension risk transfer sales of nearly $2.3 billion in 2024, reflecting a 15% increase from 2023. The pension risk transfer in-force block surpassed the $6.5 billion milestone, underscoring F&G’s success in institutional markets.
Strong Financial Metrics
F&G reported adjusted net earnings of $657 million for 2024, a 22% rise over 2023. Additionally, the adjusted return on assets (ROA), excluding significant items, was 127 basis points, up by ten basis points from the previous year.
Strategic Investments and Partnerships
The company made strategic investments worth $680 million in owned distribution companies, which generated an EBITDA of $65 million in 2024. F&G anticipates this figure to rise to $90 million in 2025, showcasing their commitment to strategic growth and partnerships.
Credit Quality and Capital Allocation
F&G maintained high credit quality, with 97% of fixed maturities being investment grade and low credit-related impairments. The company returned $125 million of capital to shareholders through dividends, emphasizing its strong capital allocation strategy.
Funding Agreements Decline
Funding agreements totaled $1 billion for 2024, down from $1.6 billion in 2023. Notably, no funding agreements were recorded in the fourth quarter, indicating a shift in the company’s financial strategy.
Sequential Compression in Fixed Income Yield
The company experienced a seven-basis point reduction in fixed income yield sequentially, attributed to higher cash balances and the runoff of higher-yielding assets.
MYGA Sales Reduction
F&G decided to allocate capital to higher-returning businesses, resulting in a reduction in MYGA sales during the fourth quarter. This strategic decision reflects the company’s focus on optimizing capital allocation for better returns.
Forward-Looking Guidance
Looking ahead, F&G Annuities & Life, Inc. remains optimistic about its growth trajectory. The company forecasts continued strong demand for its annuity and life solutions, with institutional market sales projected to remain robust. Strategic investments in distribution companies are expected to contribute significantly to future earnings, with an anticipated EBITDA of $90 million in 2025. F&G maintains a strong financial position with a GAAP book value of $5.6 billion and a target debt-to-capitalization ratio of approximately 25%.
In conclusion, the earnings call reflected a positive outlook for F&G Annuities & Life, Inc., with record-breaking sales and growth across multiple segments. Despite some challenges, the company’s strategic investments and strong financial metrics position it well for sustained growth. Investors and stakeholders can look forward to continued success as the company executes its growth strategy effectively.
