Summary of F&G Annuities & Life, Inc. Q4 2025 Earnings Call

1Key Financial Results and Metrics

Assets Under Management (AUM): Record AUM before flow reinsurance reached $73.1 billion, a 12% increase from 2024. Retained AUM was $57.6 billion, up 7%.

Sales: Total gross sales for 2025 were $14.6 billion, with core sales of $9 billion and opportunistic sales of $5.6 billion. Q4 gross sales were $3.4 billion.

Adjusted Net Earnings: Q4 adjusted net earnings were $123 million ($0.91 per share), while full-year earnings were $482 million ($3.64 per share).

Investment Portfolio: Fixed income yield was 4.65%, and alternative investment income was $65 million in Q4, below long-term expectations.

Capital Position: GAAP common equity was $6 billion, with book value per share at $44.43, up 62% since 2020.

2Strategic Updates and Business Highlights

Transitioning to a more fee-based, higher-margin, and less capital-intensive business model.

Achieved significant progress towards 2023 Investor Day targets, including a 44% increase in AUM and improvements in return on assets (ROA) and return on equity (ROE).

Strong performance in core products: indexed annuities, indexed universal life (IUL), and pension risk transfer (PRT).

Successful execution of a $750 million FABN issuance in January 2026.

Enhanced public float from 18% to 30% following a share distribution from FNF, improving market liquidity.

3Forward Guidance and Outlook

Expect continued growth in core business with a focus on optimizing capital allocation.

Anticipate fee-based earnings to rise to approximately 25% of total earnings by year-end 2028.

Projected improvement in operating expense ratio to about 45 basis points by year-end 2027.

Management remains cautious about short-term interest rates and their impact on business, emphasizing the importance of long-term rates.

4Bad News, Challenges, or Points of Concern

Alternative investment income underperformed expectations, with a shift in long-term expected returns.

Potential variability in earnings due to fluctuations in surrender fees and terminations, which could impact near-term spreads.

Concerns regarding market competition and pricing discipline in the MYGA segment, leading to moderated sales.

The company faces challenges in managing investor perceptions regarding its valuation, which is currently low compared to historical norms.

5Notable Q&A Insights

Management addressed concerns about software exposure in the investment portfolio, indicating it is manageable and well-underwritten.

Discussed the outlook for variable investment income, maintaining a cautious but optimistic stance.

Clarified that the company is capital independent and has sufficient resources to support growth without relying on external capital raises.

Emphasized the importance of maintaining a diversified panel of reinsurance partners and the potential for increased demand in the market.

Management acknowledged the need for better communication regarding the breakdown of fee-based versus spread-based earnings to improve shareholder understanding. Overall, F&G Annuities & Life, Inc. demonstrated strong financial performance and strategic progress in 2025, while also navigating challenges related to market conditions and investor perceptions.