Brighthouse Financial Inc (BHF) Q3 2024 Earnings Call Highlights: Strategic Progress Amid RBC ...

In This Article:

  • Combined Risk-Based Capital (RBC) Ratio: Estimated between 365% and 385% at the end of the third quarter.

  • Holding Company Liquid Assets: Approximately $1.3 billion as of September 30.

  • Common Stock Repurchase: $64 million repurchased in the third quarter, with an additional $25 million repurchased through November 1.

  • Total Annuity Sales: $7.8 billion year-to-date through September 30, consistent with the same period in 2023.

  • Shield Annuity Sales: $5.8 billion year-to-date, a 15% increase over 2023.

  • Life Insurance Sales: $87 million year-to-date through September 30, a 19% increase compared to the same period last year.

  • Corporate Expenses: $203 million in the third quarter and $610 million year-to-date, a 5% decrease year over year.

  • Statutory Combined Total Adjusted Capital (TAC): $5.7 billion as of September 30, an increase of $300 million from the end of the second quarter.

  • Adjusted Earnings (Excluding Notable Items): $243 million in the third quarter.

  • Notable Items Impact: Net favorable impact on adjusted earnings of $524 million after tax due to actuarial assumption review and model refinements.

  • Alternative Investment Yield: 1.6% in the third quarter.

Release Date: November 08, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • Brighthouse Financial Inc (NASDAQ:BHF) made progress on strategic initiatives to improve capital efficiency and unlock capital, aiming to return the RBC ratio to the target range of 400% to 450%.

  • The company is in the final stages of a reinsurance agreement expected to enhance the RBC ratio, with completion anticipated before year-end.

  • Brighthouse Financial Inc (NASDAQ:BHF) reported strong sales results, with total annuity sales reaching $7.8 billion year-to-date, consistent with the previous year.

  • The Shield annuity products saw a 15% increase in sales over 2023, marking a record level for the company.

  • Corporate expenses decreased by 5% year-over-year, demonstrating effective expense management.

Negative Points

  • The RBC ratio remains under pressure, estimated between 365% and 385%, below the target range, due to new business strain and changes in the interest rate environment.

  • Normalized statutory earnings were negatively impacted by new business strain, leading to a statutory loss of approximately $300 million in the quarter.

  • The company experienced lower alternative investment returns, with a yield of 1.6% in the quarter, below the expected annual return range of 9% to 11%.

  • The in-force block of business still had a negative impact on the RBC ratio, despite the growth in Shield sales and the runoff of legacy business.

  • There is uncertainty around the timing and impact of future reinsurance deals and the development of a revised hedging strategy for the in-force block, which may extend into 2025.

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