Corebridge Financial Inc
For the period ended Jun 30, 2024. Filed Aug 1, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Aug 1, 2024
CRBG$34.09-0.4%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-05-03.
0001889539-24-000022
Item 2. |Management’s Discussion and Analysis of Financial Condition and Results of OperationsOverviewCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-08-01.
0001889539-24-000030
Item 2. |Management’s Discussion and Analysis of Financial Condition and Results of OperationsOverviewThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 701 previous paragraphs and 755 current paragraphs.
499 unchanged; 166 reworded; 80 added; 35 removed; 1 previous and 10 current paragraphs rearranged.
Tables are not compared: 77 previous and 79 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (80)
Current report
•lower premiums of $1.9 billion primarily on new pension risk transfer business;
Current report
•higher net realized losses of $427 million primarily driven by higher losses on the Fortitude Re balances;
Current report
•unfavorable change in the fair value of market risk benefits, net of $287 million primarily driven by the impacts of lower equity market performance compared to the comparable period in the prior year; and
Current report
•higher interest credited to policyholder account balances of $196 million primarily due to higher interest rates and higher sales activity in fixed and fixed index annuities and higher interest rates on the growing GIC business.
Current report
•lower policyholder benefits of $1.8 billion primarily on new pension risk transfer business;
Current report
•higher net gain on divestitures of $182 million primarily from the gain on the sale of AIG Life U.K.
Current report
•lower policyholder benefits of $1.5 billion primarily on new pension risk transfer business;
Current report
•higher net investment income of $503 million primarily driven by higher base portfolio income partially offset by lower variable investment income;
Current report
•lower premiums of $1.7 billion primarily on new pension risk transfer business; and
Current report
•higher interest credited to policyholder account balances of $369 million primarily due to higher interest rates and higher sales activity in fixed and fixed index annuities and higher interest rates on the growing GIC business.
Current report
•lower policyholder benefits of $1.8 billion primarily on new pension risk transfer business;
Current report
•higher net investment income of $236 million primarily driven by higher base portfolio income partially offset by lower variable investment income; and
Current report
•lower premiums of $1.9 billion primarily on new pension risk transfer business; and
Current report
•higher interest credited to policyholder account balances of $201 million primarily due to higher interest rates and higher sales activity in fixed and fixed index annuities and higher interest rates on the growing GIC business.
Current report
•lower policyholder benefits of $1.5 billion primarily on new pension risk transfer business;
Current report
•higher net investment income of $530 million primarily driven by higher base portfolio income partially offset by lower variable investment income;
Current report
•lower income attributable to noncontrolling interest of $61 million.
Current report
•lower premiums of $1.7 billion primarily on new pension risk transfer business;and
Current report
•higher interest credited to policyholder account balances of $375 million primarily due to higher interest rates and higher sales activity in fixed and fixed index annuities and higher interest rates on the growing GIC business.
Current report
(a)Spread income represents net investment income less interest credited to policyholder account balances, exclusive of amortization of DSIof$13 million and
Current report
$13 million for the three months ended June 30,2024 and 2023, respectively, and $26 million and $27 million for the six months ended June 30, 2024 and 2023 respectively.
Current report
Fixed Annuities Net inflows increased by $3.1 billion over the prior year, primarily due to higher premiums and deposits of $2.9 billion due to higher sales and strong customer demand, lower death benefits of $242 million and lower surrenders and withdrawals of $24 million.
Current report
Fixed Index Annuities Net inflows decreased by $973 million primarily due to lower premiums and deposits of $252 million, higher surrenders and withdrawals of $672 million and higher death benefits of $49 million.
Current report
Variable Annuities Net outflows increased $1.0 billion primarily due to lower premium and deposits of $256 million, higher surrenders and withdrawals of $762 million and higher death benefits of $26 million.
Current report
(a)Spread income represents net investment income less interest credited to policyholder account balances, exclusive of amortization of DSI of $4 million and $3 million for the three months ended June 30, 2024 and 2023, respectively, and $7 million and $7 million for the six months ended June 30, 2024 and 2023, respectively.
Current report
•lower spread income of $35 million due to lower base spread income of $18 million reflecting higher crediting rates and a decrease in variable investment income of $17 million primarily due to lower alternative investment income.
Current report
*Spread income represents net investment income less interest credited to policyholder account balances, exclusive of amortization of DSI of $4 million and $3 million for the three months ended June 30, 2024 and 2023, respectively, and $7 million and $7 million for the six months ended June 30, 2024 and 2023, respectively.
Current report
Reported APTOI figures reflect the results of AIG Life U.K. until April 2024 and Laya until October 2023.
Current report
•lower domestic general operating expenses of $13 million, driven by expense efficiencies; and
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Removed paragraphs (35)
Previous report
Corebridge | First Quarter 2024 Form 10-Q 73
Previous report
Corebridge | First Quarter 2024 Form 10-Q 74
Previous report
•higher policyholder benefits of $312 million primarily on new pension risk transfer business; and
Previous report
•higher interest credited to policyholder account balances of $173 million primarily due to higher sales activity in fixed and fixed index annuities and increased interest rates on the growing GIC business.
Previous report
•higher net investment income of $294 million primarily driven by higher base portfolio income partially offset by lower variable investment income reflecting lower alternative investment income;
Previous report
•higher premiums of $191 million primarily on new pension risk transfer business;
Previous report
•lower interest expense of $30 million primarily due to lower interest expense on consolidated investment entities.
Previous report
•higher policyholder benefits of $310 million primarily on new pension risk transfer business; and
Previous report
•higher interest credited to policyholder account balances of $174 million primarily due to higher sales activity in fixed and fixed index annuities and increased interest rates on the growing GIC business.
Previous report
(a)Spread income represents net investment income less interest credited to policyholder account balances, exclusive of amortization of DSI of $13 million and $14 million for the three months ended March 31, 2024 and 2023 respectively.
Previous report
(a) Spread income represents net investment income less interest credited to policyholder account balances, exclusive of amortization of DSI of $3 million and $4 million for the three months ended March 31, 2024 and 2023, respectively.
Previous report
*Spread income represents net investment income less interest credited to policyholder account balances, exclusive of amortization of DSI of $3 million and $4 million for the three months ended March 31, 2024 and 2023, respectively.
Previous report
–higher policyholder benefits, net of premiums and fees, of $38 million, primarily driven by one-time reinsurance adjustments; and
Previous report
–lower other income of $29 million, primarily driven by the sale of Laya in October 2023 ($27 million).
Previous report
•lower general operating expenses of $29 million, primarily driven by the sale of Laya in October 2023 ($20 million). General operating expenses excluding the impact from the sale of Laya decreased $9 million.
Previous report
Premiums and deposits, excluding the effect of foreign exchange, increased $37 million for the three months ended March 31, 2024 compared to the prior year primarily due to growth in international life and domestic traditional life premiums.
Previous report
(b)Excludes $13 million and $13 million of fixed maturity securities for which no NAIC Designation is available at March 31, 2024 and December 31, 2023, respectively.
Previous report
Excludes $13 million and$13 million of fixed maturity securities for which no NAIC Designation is available at March 31, 2024 and December 31, 2023, respectively.
Previous report
Net impact on pre-tax income of $221 million was primarily driven by increases in equity markets.
Reworded paragraphs (166)
Previous wording
This MD&A addresses the consolidated financial condition of Corebridge as of March 31, 2024, compared with December 31, 2023, and its consolidated results of operations for the three months ended March 31, 2024 and 2023. In addition to historical data, this discussion contains forward-looking statements about our business operations and financial performance based on current expectations that involve risks, uncertainties and assumptions. Actual results may differ materially from those discussed in the forward-looking statements as a result of various factors. You should read the following analysis of our consolidated financial condition and results of operations in conjunction with the“Management’s Discussion and Analysis of Results of Operations and Financial Condition,” the unaudited Condensed Consolidated Financial Statements and the statements under “Cautionary Statements Regarding Forward-Looking Information,” included elsewhere in this Quarterly Report and the “Risk Factors” section in the 2023 Form 10-K.
Current wording
This MD&A addresses the consolidated financial condition of Corebridge as of June 30, 2024, compared with December 31, 2023, and its consolidated results of operations for the three and six months ended June 30, 2024 and 2023. In addition to historical data, this discussion contains forward-looking statements about our business operations and financial performance based on current expectations that involve risks, uncertainties and assumptions. Actual results may differ materially from those discussed in the forward-looking statements as a result of various factors. You should read the following analysis of our consolidated financial condition and results of operations in conjunction with the“Management’s Discussion and Analysis of Results of Operations and Financial Condition,” the unaudited Condensed Consolidated Financial Statements and the statements under “Cautionary Statements Regarding Forward-Looking Information,” included elsewhere in this Quarterly Report and the “Risk Factors” section in the 2023 Form 10-K.
Current wording
Corebridge | Second Quarter 2024 Form 10-Q 81
Current wording
Corebridge | Second Quarter 2024 Form 10-Q 82
Previous wording
•General operating and other expenses include expenses associated with conducting our business, including salaries, other employee-related compensation and other operating expenses such as professional services or travel;
Current wording
•General operating expenses include expenses associated with conducting our business, including salaries, other employee-related compensation and other operating expenses such as professional services or travel;
Previous wording
As of March 31, 2024, $26.1 billion of reserves had been ceded to Fortitude Re.
Current wording
As of June 30, 2024, $25.5 billion of reserves had been ceded to Fortitude Re.
Previous wording
In 2021, we entered into a strategic partnership with Blackstone pursuant to which Blackstone acquired a 9.9% position in our common stock and we entered into a long-term asset management relationship with Blackstone IM. As of March 31, 2024, Blackstone managed approximately $62.7 billion in book value of assets in our investment portfolio.
Current wording
In 2021, we entered into a strategic partnership with Blackstone pursuant to which Blackstone acquired a 9.9% position in our common stock and we entered into a long-term asset management relationship with Blackstone IM. As of June 30, 2024, Blackstone managed approximately $64.4 billion in book value of assets in our investment portfolio.
Previous wording
Since April 2022, we entered into investment management agreements with BlackRock and its investment advisory affiliates. As of March 31, 2024, BlackRock managed approximately $85.7 billion in book value of assets in our investment portfolio, consisting of liquid fixed income and certain private placement assets.
Current wording
Since April 2022, we entered into investment management agreements with BlackRock and its investment advisory affiliates. As of June 30, 2024, BlackRock managed approximately $84.0 billion in book value of assets in our investment portfolio, consisting of liquid fixed income and certain private placement assets.
Previous wording
In connection with our separation from AIG, we have incurred and expect to continue to incur one-time and recurring expenses. As of March 31, 2024, we have incurred approximately $492 million of one-time expenses on a pre-tax basis. These expenses primarily relate to replicating and replacing functions, systems and infrastructure provided by AIG; rebranding; and accounting advisory, consulting and actuarial fees. In addition to these separation costs, we expect to incur costs related to the evolution of our investments organization to reflect our strategic partnerships with key external managers, our implementation of BlackRock’s “Aladdin” investment management technology platform and our expected reduction in fees for asset management services.
Current wording
In connection with our separation from AIG, we have incurred and expect to continue to incur one-time and recurring expenses. As of June 30, 2024, we have incurred approximately $519 million of one-time expenses on a pre-tax basis. These expenses primarily relate to replicating and replacing functions, systems and infrastructure provided by AIG; rebranding; and accounting advisory, consulting and actuarial fees. In addition to these separation costs, we expect to incur costs related to the evolution of our investments organization to reflect our strategic partnerships with key external managers, our implementation of BlackRock’s “Aladdin” investment management technology platform and our expected reduction in fees for asset management services.
Previous wording
In addition, as part of Corebridge Forward, we aim to achieve an annual run rate expense reduction of approximately $400 million on a pre-tax basis and expect the majority of the reduction to be achieved within 24 months of the IPO. Through March 31, 2024 we have acted upon or contracted approximately $394 million of exit run rate savings on a pre-tax basis. Corebridge Forward is expected to have a cumulative cost to achieve of approximately $300 million on a pre-tax basis. As of March 31, 2024, the cost to achieve has been approximately $181 million.
Current wording
In addition, as part of Corebridge Forward, we aimed to achieve an annual run rate expense reduction of approximately $400 million on a pre-tax basis within 24 months of the IPO. Through June 30, 2024 we have acted upon or contracted the full $400 million of exit run rate savings on a pre-tax basis. Corebridge Forward is expected to have a cumulative cost to achieve of approximately $300 million on a pre-tax basis. As of June 30, 2024, the cost to achieve has been approximately $203 million.
Previous wording
Alternative investments include private equity funds which are generally reported on a one-quarter lag. Accordingly, changes in valuations driven by equity market conditions during the first quarter of 2024 may impact the private equity investments in the alternative investments portfolio in the second quarter of 2024.
Current wording
Alternative investments include private equity funds which are generally reported on a one-quarter lag. Accordingly, changes in valuations driven by equity market conditions during the second quarter of 2024 may impact the private equity investments in the alternative investments portfolio in the third quarter of 2024.
Previous wording
A rising interest rate environment benefits our spread income as we reinvest cash flows from existing business at higher rates and should have a positive impact on sales of spread-based products resulting in an increase in our base net investment spreads.
Current wording
A rising interest rate environment benefits our spread income as we reinvest cash flows from existing business at higher rates and should have a positive impact on sales of spread-based products.
Previous wording
Of the aggregate fixed account values of our Individual Retirement and Group Retirement annuity products,52% and 54% were crediting at the contractual minimum guaranteed interest rate at March 31, 2024 and December 31, 2023, respectively. The percentages of fixed account values of our annuity products that are currently crediting at rates above 1% were 49% and 50% at March 31, 2024 and December 31, 2023, respectively. In the universal life insurance products in our Life Insurance business, 59% and 59% of the account values were crediting at the contractual minimum guaranteed interest rate at March 31, 2024 and December 31, 2023, respectively. These businesses continue to focus on pricing discipline and strategies to manage the minimum guaranteed interest crediting rates offered on new sales in the context of regulatory requirements and competitive positioning.
Current wording
Of the aggregate fixed account values of our Individual Retirement and Group Retirement annuity products, 49% and 54% were crediting at the contractual minimum guaranteed interest rate at June 30, 2024 and December 31, 2023, respectively. The percentages of fixed account values of our annuity products that are currently crediting at rates above 1% were 47% and 50% at June 30, 2024 and December 31, 2023, respectively. In the universal life insurance products in our Life Insurance business, 59% and 59% of the account values were crediting at the contractual minimum guaranteed interest rate at June 30, 2024 and December 31, 2023, respectively. These businesses continue to focus on pricing discipline and strategies to manage the minimum guaranteed interest crediting rates offered on new sales in the context of regulatory requirements and competitive positioning.
Previous wording
In addition, on April 25, 2024, the Department of Labor (“DOL”) published a final rule in the Federal Register updating the definition for when a person is an “investment advice fiduciary” for purposes of transactions with ERISA qualified plans, related plan participants and IRAs. The DOL also published changes with respect to existing prohibited transactions exemptions (“PTEs”) relating to such advice, including PTE 84-24 and PTE 2020-02. The rule is effective September 23, 2024, and includes a one-year transition period thereafter for certain requirements. We are evaluating the potential impact of the DOL’s rule to our business.
Current wording
In addition, on April 25, 2024, the Department of Labor (“DOL”) published a final rule in the Federal Register updating the definition for when a person is an “investment advice fiduciary” for purposes of transactions with ERISA qualified plans, related plan participants and IRAs. The DOL also published changes with respect to existing prohibited transactions exemptions (“PTEs”) relating to such advice, including PTE 84-24 and PTE 2020-02. Orders staying the rule’s September 23, 2024 effective date were issued by the U.S. District Courts for the Eastern District of Texas and the Northern District of Texas on July 25, 2024 and July 26, 2024, respectively, in connection with separate lawsuits challenging the rule. We are actively monitoring the progress of the litigation while continuing to evaluate potential impact of the DOL rule to our business.
Previous wording
Premiums and deposits is a non-GAAP financial measure that includes direct and assumed premiums received and earned on traditional life insurance policies and life-contingent payout annuities, as well as deposits received on universal life insurance, investment-type annuity contracts and GICs. We believe the measure of premiums and deposits is useful in understanding customer demand for our products, evolving product trends and our sales performance period over period.
Current wording
Premiums and deposits is a non-GAAP financial measure that includes direct and assumed premiums received and earned on traditional life insurance policies and life-contingent payout annuities, as well as deposits received on universal life insurance, investment-type annuity contracts and GICs. Premiums and deposits are presented net of internal replacements. We believe the measure of premiums and deposits is useful in understanding customer demand for our products, evolving product trends and our sales performance period over period.
Previous wording
(b)Excludes client deposits into advisory and brokerage accounts of $730 million and $542 million for the three months ended March 31, 2024 and 2023, respectively.
Current wording
(b)Excludes client deposits into advisory and brokerage accounts of $783 million and $580 million for the three months ended June 30, 2024 and 2023, respectively, and $1.5 billion and $1.1 billion for the six months ended June 30, 2024 and 2023, respectively.
Previous wording
(c)Includes inflows related to in-plan mutual funds of $791 million and $1.0 billion for the three months ended March 31, 2024 and 2023, respectively.
Current wording
(c)Includes inflows related to in-plan mutual funds of $790 million and $720 million for the three months ended June 30, 2024 and 2023, respectively, and $1.6 billion and $1.7 billion for the six months ended June 30, 2024 and 2023, respectively.
Previous wording
*The March 31, 2024 and December 31, 2023 AUMA excludes $184 million and $181 million, respectively, of assets that were reclassified to Assets held-for-sale in the Condensed Consolidated Balance Sheets. See Note 4 to the Condensed Consolidated Financial Statements for additional information.
Current wording
*The December 31, 2023 AUMA excludes $181 million, of assets that were reclassified to Assets held-for-sale in the Condensed Consolidated Balance Sheets. See Note 4 in the 2023 Form 10-K Notes to the Condensed Consolidated Financial Statements for additional information.
Previous wording
The following section provides a comparative discussion of our consolidated results of operations on a reported basis for the three months ended March 31, 2024 and 2023. For factors that relate primarily to a specific business, see “— Business Segment Operations.”
Current wording
The following section provides a comparative discussion of our consolidated results of operations on a reported basis for the three and six months ended June 30, 2024 and 2023. For factors that relate primarily to a specific business, see “— Business Segment Operations.”
Previous wording
We recorded pre-tax income of $1.0 billion in the three months ended March 31, 2024 compared to pre-tax loss of $669 million in the three months ended March 31, 2023. The change in pre-tax income was primarily due to:
Current wording
We recorded pre-tax income of $456 million in the three months ended June 30, 2024 compared to pre-tax income of $911 million in the three months ended June 30, 2023. The change in pre-tax income was primarily due to:
Previous wording
•higher net investment income of $229 million primarily driven by higher base portfolio income partially offset by lower income related to the Fortitude Re funds withheld assets and lower variable investment income; and
Current wording
•higher net investment income of $274 million primarily driven by higher base portfolio income and higher income related to the Fortitude Re funds withheld assets partially offset by lower variable investment income; and
Previous wording
For the three months ended March 31, 2024, there was an income tax expense of $189 million on income from operations, resulting in an effective tax rate on income from operations of 18.6%.
Current wording
For the three months ended June 30, 2024, there was an income tax expense of $115 million on income from operations, resulting in an effective tax rate on income from operations of 25.2%.
Previous wording
•lower net realized losses of $1.1 billion primarily driven by lower losses on the Fortitude Re funds withheld embedded derivative and withheld assets;
Current wording
•lower net realized losses of $711 million primarily driven by lower losses on the Fortitude Re balances;
Previous wording
•favorable change in the fair value of market risk benefits, net of $565 million primarily driven by the impacts of changes in equity markets and interest rate volatility;
Current wording
•higher favorable change in the fair value of market risk benefits, net of $278 million primarily driven by the impacts of higher equity market performance compared to the comparable period in the prior year; and
Previous wording
•higher premiums of $190 million primarily on new pension risk transfer business.
Current wording
•higher net gain on divestitures of $190 million primarily from the gain on the sale of AIG Life U.K.
Showing the first 40 of 166 pairs. Open the source sections for the rest.
Rearranged current paragraphs (10)
Current report — wording carried from elsewhere
Six Months Ended June 30, 2024 to Six Months Ended June 30, 2023 Net Income Comparison
Current report — wording carried from elsewhere
We recorded pre-tax income of $1.5 billion in the six months ended June 30, 2024 compared to pre-tax income of $242 million in the six months ended June 30, 2023 .The change in pre-tax income was primarily due to:
Current report — wording carried from elsewhere
For the six months ended June 30, 2024, there was an income tax expense of $304 million on income from operations, resulting in an effective tax rate on income from operations of 20.7%.
Current report — wording carried from elsewhere
•higher spread income of $129 million primarily driven by higher base spread income due to improved base portfolio yields and growth in invested assets driven by higher general account sales.
Current report — wording carried from elsewhere
•higher fee income, net of advisory fee expenses of $20 million due to higher average separate account, advisory, and mutual fund assets driven by improved equity market performance; and
Current report — wording carried from elsewhere
Net flows remained negative and declined by $128 million primarily due to an increase in surrenders and withdrawals of $163 million, driven by an increase in in-plan annuity surrenders and an increase in death and payout benefit annuity benefits of $40 million, partially offset by an increase in deposits of $75 million. Net outflows were concentrated in variable annuity products with higher contractual guaranteed minimum crediting rates.
Current report — wording carried from elsewhere
Premiums and deposits decreased compared to the prior year period by $0.4 billion, primarily due to lower premiums on new PRT business of $1.5 billion, partially offset by higher deposits on new GICs of $1.0 billion.
Current report — wording carried from elsewhere
•lower corporate expenses of $19 million primarily driven by Corebridge Forward, our modernization program delivering both expense reduction and increased efficiency.
Current report — wording carried from elsewhere
(a)Excludes approximately $61 million and $121 million of consolidated investment entities and $624 million and $732 million of eliminations primarily related to the consolidated investment entities and the insurance operating subsidiaries at June 30, 2024 and December 31, 2023, respectively.
Current report — wording carried from elsewhere
On an economic basis, the changes in the fair value of the hedge portfolio were partially offset by the changes in the economic hedge target. In the six months ended June 30, 2023, we had a net mark-to-market loss of approximately$375 million from our hedging activities related to our economic hedge target primarily driven by tightening credit spreads and lower equity volatility.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
•The hedge program is designed of offset moves in the GMWB economic liability and therefore has a lower sensitivity to equity market changes than the MRBs.