Corebridge Financial, Inc.

Previous wording

This MD&A addresses the consolidated financial condition of Corebridge as of September 30, 2024, compared with December 31, 2023, and its consolidated results of operations for the three and nine months ended September 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

This MD&A addresses the consolidated financial condition of Corebridge as of March 31, 2025, compared with December 31, 2024, and its consolidated results of operations for the three months ended March 31, 2025 and 2024. 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 (unaudited)Condensed Consolidated Financial Statements and the statements under “Cautionary Statements Regarding Forward-Looking Information,” included elsewhere in this Quarterly Report and the “Management’s Discussion and Analysis of Results of Operations and Financial Condition,” and the “Risk Factors” section in the 2024 Form 10-K.

Previous wording

•Premiums are principally derived from our traditional life insurance and certain annuity products including pension risk transfer (“PRT”) transactions and structured settlements with life contingencies. Our premium income is driven by growth in new policies and contracts written and persistency of our in-force policies, both of which are influenced by a combination of factors including our efforts to attract and retain customers and market conditions that influence demand for our products;

Current wording

•Premiums are principally derived from our traditional life insurance and certain annuity products including PRT transactions and structured settlements with life contingencies. Our premium income is driven by growth in new policies and contracts written and persistency of our in-force policies, both of which are influenced by a combination of factors including our efforts to attract and retain customers and market conditions that influence demand for our products;

Previous wording

•Amortization of deferred policy acquisition costs and value of business acquiredfor all contracts except for other investment contracts is amortized, on a constant level basis over the expected term of the related contracts, using assumptions consistent with those used in estimating the related liability for future policy benefits, or any other related balances, for those corresponding contracts, as applicable. VOBA is determined at the time of acquisition and is reported with DAC. This value is based on the present value of future pre-tax profits discounted at yields applicable at the time of purchase;

Current wording

•Amortization of deferred policy acquisition costs (“DAC”) and value of business acquired (“VOBA”)for all contracts except for other investment contracts is amortized, on a constant level basis over the expected term of the related contracts, using assumptions consistent with those used in estimating the related liability for future policy benefits, or any other related balances, for those corresponding contracts, as applicable. VOBA is determined at the time of acquisition and is reported with DAC. This value is based on the present value of future pre-tax profits discounted at yields applicable at the time of purchase;

Previous wording

Our net income experiences ongoing volatility as a result of the reinsurance agreements, which, as described above, give rise to a funds withheld payable that contains an embedded derivative. However, this net income volatility is almost entirely offset with a corresponding change in OCI, which reflects the fair value change from the investment portfolio supporting the funds withheld payable, which is primarily available-for-sale securities, resulting in minimal impact to our comprehensive income (loss) and equity attributable to Corebridge. The Company has also elected the fair value option on the acquisition of certain new fixed maturity securities, helping reduce the mismatch over time.

Current wording

Our net income experiences ongoing volatility as a result of the reinsurance agreements, which, as described above, give rise to a funds withheld payable that contains an embedded derivative. However, this net income volatility is almost entirely offset with a corresponding change in OCI, which reflects the fair value change from the investment portfolio supporting the funds withheld payable, which is primarily available-for-sale securities, resulting in minimal impact to our comprehensive income (loss) and equity attributable to Corebridge. The Company has also elected the fair value option on the acquisition of certain new fixed maturity securities, helping reduce the mismatch over time. VALIC’s modco agreement with Fortitude Re was recaptured effective January 1, 2025, resulting in a $45 million charge to pre-tax earnings. As of March 31, 2025, $24.6 billion of reserves had been ceded to Fortitude Re.

Previous wording

For additional information regarding Corebridge’s impact of Variable Annuity Guaranteed Benefit Riders and Hedging, see “Future Policy Benefits, Policyholder Contract Deposits and Market Risk Benefits — Variable Annuity Guaranteed Benefits and Hedging Results.”

Current wording

For additional information regarding Corebridge’s impact of Variable Annuity Guaranteed Benefit Riders and Hedging, see “Future Policy Benefits, Policyholder Contract Deposits and Market Risk Benefits and Update of Actuarial Assumptions and Models — Variable Annuity Guaranteed Benefits and Hedging Results.”

Previous wording

Embedded Derivatives for Fixed Index Annuity and Index Universal Life Products

Current wording

Embedded Derivatives for Fixed Index Annuity, Registered Index-Linked Annuity and Index Universal Life Products

Previous wording

Fixed index annuity contracts contain index interest credits which are accounted for as embedded derivatives and our index universal life insurance products also contain embedded derivatives. Policyholders may elect to rebalance among the various crediting strategies within the product at specified renewal dates. At the end of each index term, we generally have the opportunity to re-price the index component by establishing different participation rates or caps on index credited rates. The index crediting feature of these products results in the recognition of an embedded derivative that is required to be bifurcated from the host contract and carried at fair value with changes in the fair value of the liabilities recorded in Net realized gains (losses). Option pricing models are used to estimate fair value, taking into account assumptions for future index growth rates, volatility of the index, future interest rates and our ability to adjust the participation rate and the cap on index credited rates in light of market conditions and policyholder behavior assumptions.

Current wording

Fixed index annuity and registered index-linked annuity contracts contain index interest credits which are accounted for as embedded derivatives and our index universal life insurance products also contain embedded derivatives. In contrast to fixed index annuity contracts, registered index-linked annuity contract owners also accept limited exposure to negative index interest credits in return for higher potential positive index credits. Policyholders may elect to rebalance among the various crediting strategies within the product at specified renewal dates. At the end of each index term, we generally have the opportunity to re-price the index component by establishing different participation rates or caps on index credited rates. The index crediting feature of these products results in the recognition of an embedded derivative that is required to be bifurcated from the host contract and carried at fair value with changes in the fair value of the liabilities recorded in Net realized gains (losses). Option pricing models are used to estimate fair value, taking into account assumptions for future index growth rates, volatility of the index, future interest rates and our ability to adjust the participation rate and the cap on index credited rates in light of market conditions and policyholder behavior assumptions.

Previous wording

The following table summarizes the fair values of the embedded derivatives for fixed index annuity and index universal life products:

Current wording

The following table summarizes the fair values of the embedded derivatives for fixed index annuity, registered index-linked annuity and index universal life products:

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 September 30, 2024, Blackstone managed approximately $67.5 billion in book value of assets in our investment portfolio.

Current wording

In 2021, we entered into a long-term asset management relationship with Blackstone IM. As of March 31, 2025, Blackstone managed approximately $69.7 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 September 30, 2024, BlackRock managed approximately $86.3 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 March 31, 2025, BlackRock managed approximately $87.2 billion in book value of assets in our investment portfolio, consisting of liquid fixed income and certain private placement assets.

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 third quarter of 2024 may impact the private equity investments in the alternative investments portfolio in the fourth 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 first quarter of 2025 may impact the private equity investments in the alternative investments portfolio in the second quarter of 2025.

Previous wording

Rising interest rates could create the potential for increased sales but could also drive higher surrenders relative to what we have already experienced. Fixed annuities have surrender charge periods, generally in the three-to-seven-year range. Fixed index annuities have surrender charge periods, generally in the five-to-ten-year range, and within our Group Retirement segment, certain of our fixed investment options are subject to other withdrawal restrictions, which may help mitigate increased early surrenders in a rising rate environment. In addition, older contracts that have higher minimum interest rates and continue to be attractive to contract holders have driven better than expected persistency in fixed annuities, although the liabilities for such contracts have continued to decrease over time in amount and as a percentage of the total annuity portfolio. We closely monitor surrenders of fixed annuities as contracts with lower minimum interest rates come out of the surrender charge period.

Current wording

Rising interest rates could create the potential for increased sales but could also drive higher surrenders relative to what we have historically experienced. Fixed annuities have surrender charge periods, generally in the three-to-seven-year range. Fixed index annuities have surrender charge periods, generally in the five-to-ten-year range, and within our Group Retirement segment, certain of our fixed investment options are subject to other withdrawal restrictions, which may help mitigate increased early surrenders in a rising rate environment. In addition, older contracts that have higher minimum interest rates and continue to be attractive to contract holders have driven better than expected persistency in fixed annuities, although the liabilities for such contracts have continued to decrease over time in amount and as a percentage of the total annuity portfolio. We closely monitor surrenders of fixed annuities as contracts with lower minimum interest rates come out of the surrender charge period.

Previous wording

For investment-oriented products, including universal life insurance, and variable, fixed and fixed index annuities, in each of our operating and reportable segments, our spread management strategies include disciplined pricing and product design for new business, modifying or limiting the sale of products that do not achieve targeted spreads, using asset-liability management to match assets to liabilities to the extent practicable and actively managing crediting rates to help mitigate some of the pressure on investment spreads. Renewal crediting rate management is guided by specific contract provisions designed to allow crediting rates to be reset at pre-established intervals and subject to minimum crediting rate guarantees. We expect to continue to adjust crediting rates on in-force business, as appropriate, to be responsive to changing rate environments. As interest rates rise, we may need to raise crediting rates on in-force business for competitive and other reasons, potentially offsetting a portion of the additional investment income resulting from investing in a higher interest rate environment.

Current wording

For investment-oriented products, including universal life insurance, and variable, fixed, fixed index and registered index-linked annuities in each of our operating and reportable segments, our spread management strategies include disciplined pricing and product design for new business, modifying or limiting the sale of products that do not achieve targeted spreads, using asset-liability management to match assets to liabilities to the extent practicable and actively managing crediting rates to help mitigate some of the pressure on investment spreads. Renewal crediting rate management is guided by specific contract provisions designed to allow crediting rates to be reset at pre-established intervals and subject to minimum crediting rate guarantees. We expect to continue to adjust crediting rates on in-force business, as appropriate, to be responsive to changing rate environments. As interest rates rise, we may need to raise crediting rates on in-force business for competitive and other reasons, potentially offsetting a portion of the additional investment income resulting from investing in a higher interest rate environment.

Previous wording

Of the aggregate fixed account values of our Individual Retirement and Group Retirement annuity products, 48% and 54% were crediting at the contractual minimum guaranteed interest rate at September 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 45% and 50% at September 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 September 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.

Current wording

Of the aggregate fixed account values of our Individual Retirement and Group Retirement annuity products, 46% and 47% were crediting at the contractual minimum guaranteed interest rate at March 31, 2025 and December 31, 2024, 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, 2025 and December 31, 2024, 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

The final rules include a phased-in compliance period beginning in fiscal year 2025 for large accelerated filers such as Corebridge. Numerous legal challenges were filed after the rule’s adoption, which lawsuits have been consolidated in the Eighth Circuit. On April 4, 2024, the SEC exercised its discretion to stay the final rules pending completion of judicial review in the U.S. Court of Appeals for the Eighth Circuit. Corebridge is evaluating the potential impacts of these new requirements. However, if these requirements are implemented following completion of judicial review, they may increase the complexity of Corebridge’s periodic reporting as a U.S. public company and are expected to result in additional compliance and reporting costs.

Current wording

For example, on March 6, 2024, the SEC adopted final rules that require registrants, including Corebridge, to disclose certain climate-related information in registration statements and annual reports. Numerous legal challenges were filed after the rule’s adoption, which lawsuits have been consolidated in the Eighth Circuit. On April 4, 2024, the SEC exercised its discretion to stay the final rules pending completion of judicial review in the U.S. Court of Appeals for the Eighth Circuit. Corebridge is evaluating the potential impacts of these new requirements. On March 27, 2025, the SEC voted to end its defense of the final rules. However, if these requirements are implemented following completion of judicial review or otherwise, they may increase the complexity of Corebridge’s periodic reporting as a U.S. public company and are expected to result in additional compliance and reporting costs.

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. 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. On September 20, 2024, DOL filed a notice of appeal confirming its intent to appeal these two orders to the United States Court of Appeals for the Fifth Circuit. We are actively monitoring the progress of the litigation while continuing to evaluate potential impact of the DOL 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. On December 20, 2024, DOL filed a consolidated opening brief, appealing these two orders to the United States Court of Appeals for the Fifth Circuit. Since filing this appeal, DOL has asked the Fifth Circuit to hold the case in abeyance on two occasions. The matter is currently stayed until June 16, 2025. We are actively monitoring the progress of the litigation while continuing to evaluate potential impact of the DOL rule to our business.

Previous wording

For information regarding our regulation and supervision by different regulatory authorities in the United States and abroad, see “Business—Regulation” in the 2023 Form 10-K.

Current wording

For information regarding our regulation and supervision by different regulatory authorities in the United States and abroad, see “Business—Regulation—U.S. Regulation” and “Business—Regulation—International Regulation” in the 2024 Form 10-K.

Previous wording

Adjusted pre-tax operating income (“APTOI”)is derived by excluding the items set forth below from income from operations before income tax. These items generally fall into one or more of the following broad categories: legacy matters having no relevance to our current businesses or operating performance; adjustments to enhance transparency to the underlying economics of transactions; and recording adjustments to APTOI that we believe to be common in our industry. We believe the adjustments to pre-tax income are useful for gaining an understanding of our overall results of operations.

Current wording

Adjusted pre-tax operating income (“APTOI”)is derived by excluding the items set forth below from income (loss) before income tax expense (benefit). These items generally fall into one or more of the following broad categories: legacy matters having no relevance to our current businesses or operating performance; adjustments to enhance transparency to the underlying economics of transactions; and recording adjustments to APTOI that we believe to be common in our industry. We believe the adjustments to pre-tax income are useful for gaining an understanding of our overall results of operations.

Previous wording

(b)Excludes client deposits into advisory and brokerage accounts of $761 million and $656 million for the three months ended September 30, 2024 and 2023, respectively, and $2.3 billion and $1.8 billion for the nine months ended September 30, 2024 and 2023, respectively.

Current wording

(b)Excludes client deposits into advisory and brokerage accounts of $707 million and $730 million for the three months ended March 31, 2025 and 2024, respectively.

Previous wording

(c)Includes inflows related to in-plan mutual funds of $770 million and $773 million for the three months ended September 30, 2024 and 2023, respectively, and $2.4 billion and $2.5 billion for the nine months ended September 30, 2024 and 2023, respectively.

Current wording

(c)Includes inflows related to in-plan mutual funds of $775 million and $791 million for the three months ended March 31, 2025 and 2024, respectively.

Previous wording

Net investment income (APTOI basis) is the sum of base portfolio income and variable investment income.

Current wording

Net investment income (APTOI basis) is the sum of base portfolio income and variable investment income. We believe that presenting net investment income on an APTOI basis is useful for gaining an understanding of the main drivers of investment income.

Previous wording

Variable investment income includes call and tender income, commercial mortgage loan prepayments, changes in market value of investments accounted for under the fair value option, interest received on defaulted investments (other than foreclosed real estate), income from alternative investments and other miscellaneous investment income, including income of certain partnership entities that are required to be consolidated. Alternative investments include private equity funds which are generally reported on a one-quarter lag.

Current wording

Variable investment income includes call and tender income from make-whole payments on commercial mortgage loan prepayments, changes in market value of investments accounted for under the fair value option, interest received on defaulted investments (other than foreclosed real estate), income from alternative investments and other miscellaneous investment income, including income of certain partnership entities that are required to be consolidated. Alternative investments include private equity funds which are generally reported on a one-quarter lag.

Previous wording

The following section provides a comparative discussion of our consolidated results of operations on a reported basis for the three and nine months ended September 30, 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 months ended March 31, 2025 and 2024. For factors that relate primarily to a specific business, see “— Business Segment Operations.”

Previous wording

We recorded a pre-tax loss of $1.6 billion in the three months ended September 30, 2024 compared to pre-tax income of $2.5 billion in the three months ended September 30, 2023. The change in pre-tax income was primarily due to:

Current wording

We recorded a pre-tax loss of $862 million in the three months ended March 31, 2025 compared to pre-tax income of $1.0 billion in the three months ended March 31, 2024. The change in pre-tax income was primarily due to:

Previous wording

•lower premiums of $1.8 billion primarily on new pension risk transfer business;

Current wording

•lower premiums of $1.4 billion primarily on new pension risk transfer business;

Previous wording

•higher net realized losses of $3.5 billion primarily driven by higher losses on the Fortitude Re balances;

Current wording

•higher net realized losses of $1.1 billion primarily driven by higher losses on the Fortitude Re balances, losses from derivatives and index-linked interest credited embedded derivatives, net of related hedges;

Previous wording

•unfavorable change in the fair value of market risk benefits, net of $743 million primarily driven by the impacts of lower interest rates compared to the comparable period in the prior year; and

Current wording

•unfavorable change in the fair value of market risk benefits, net of $754 million primarily driven by the impacts of relative changes in interest rates and lower equity market performance compared to the comparable period in the prior year; and

Previous wording

•lower policyholder benefits of $1.5 billion primarily on new pension risk transfer business;

Current wording

•lower policyholder benefits of $1.4 billion primarily on new pension risk transfer business; and

Previous wording

For the three months ended September 30, 2024, there was an income tax benefit of $407 million on loss from operations, resulting in an effective tax rate on loss from operations of 25.5%.

Current wording

For the three months ended March 31, 2025, there was an income tax benefit of $205 million on loss from operations, resulting in an effective tax rate on income from operations of 23.8%.

Previous wording

•higher interest credited to policyholder account balances of $217 million primarily due to higher sales activity in fixed and fixed index annuities and continued growth in our GIC business.

Current wording

•higher interest credited to policyholder account balances of $217 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; and

Previous wording

•lower income attributable to noncontrolling interest of $32 million.

Current wording

•higher income attributable to noncontrolling interest of $58 million.

Previous wording

•lower policyholder benefits of $1.5 billion primarily on new pension risk transfer business;

Current wording

•lower policyholder benefits of $1.4 billion primarily on new pension risk transfer business; and

Previous wording

•Individual Retirement – consists of fixed annuities, fixed index annuities and variable annuities.

Current wording

•Individual Retirement – consists of fixed annuities, fixed index annuities, registered index-linked annuities and variable annuities.

Previous wording

•Life Insurance –primary products in the United States include term life and universal life insurance. The International Life business issued individual and group life insurance in the United Kingdom and distributed private medical insurance in Ireland. On October 31, 2023 Corebridge completed the sale of Laya and on April 8, 2024 completed the sale of AIG Life U.K.

Current wording

•Life Insurance – consists of term and universal life insurance products in the United States. The International Life business issued individual and group life insurance in the United Kingdom. On April 8, 2024, Corebridge completed the sale of AIG Life U.K.

Previous wording

(b)Excludes $— million and $13 million of fixed maturity securities for which no NAIC Designation is available at September 30, 2024 and December 31, 2023, respectively.

Current wording

(a)Spread income represents net investment income less interest credited to policyholder account balances, exclusive of amortization of DSI of $12 million and $13 million for the three months ended March 31, 2025 and 2024, respectively.

Previous wording

•higher non-deferrable insurance commissions of $13 million mostly due to continued growth in the Fixed index annuity business.

Current wording

•higher non-deferrable insurance commissions of $16 million primarily due to continued growth in the fixed index annuity business;

Previous wording

•higher amortization of DAC and DSI of $26 million due to growth in Fixed and Fixed index annuity business; and

Current wording

•higher amortization of DAC and DSI of $14 million due to growth in fixed and fixed index annuity business and higher interest rates; and

Previous wording

•lower general operating expenses of $12 million.

Current wording

•higher general operating expenses of $12 million.

Previous wording

The following table presents Individual Retirement AUMA by product:

Current wording

The following table presents Individual Retirement AUMA by account type:

Previous wording

AUMA increased $13.6 billion driven by an increase of $11.2 billion in the general account and higher separate accounts asset values of $2.4 billion. The general account increased primarily due to positive general account net flows and lower interest rates resulting in unrealized gains from fixed maturities securities. The separate account increased primarily due to increases in the equity markets, partially offset by outflows from separate accounts.

Current wording

AUMA increased $316 million driven by an increase of $2.7 billion in the general account, offset by lower separate accounts asset values of $2.4 billion. The general account increased primarily due to positive general account net flows and lower interest rates resulting in unrealized gains from fixed maturities securities. The separate account decreased primarily due to outflows from separate accounts and declines in the equity markets.