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

1Key Financial Results and Metrics

Assets Under Management (AUM): Record AUM before flow reinsurance reached $73.1 billion, up 12% from year-end 2024; retained AUM was $57.6 billion, up 7%.

Sales: Gross sales totaled $14.6 billion for the year, with core sales (indexed annuities, indexed universal life, pension risk transfer) at $9 billion. Opportunistic sales (MYGA, funding agreements) were $5.6 billion.

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

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

Capital Position: Estimated RBC ratio was 430%, above the target of 400%. Returned $137 million to shareholders through dividends.

2Strategic Updates and Business Highlights

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

Strong performance in core products, with indexed annuities and indexed universal life showing steady growth.

Continued focus on expense management, reducing the operating expense ratio to 50 basis points from 60 basis points year-over-year.

Successful execution of a $750 million FABN issuance in January 2026, expanding the investor base.

Completed a strategic transaction to sell F&G Life Re Limited, expecting net proceeds of approximately $300 million.

3Forward Guidance and Outlook

Anticipates continued growth in core business and fee-based earnings, aiming for fee-based earnings to comprise 25% of total earnings by 2028.

Expectation of lower surrender fee income in 2026 compared to 2025, which may impact near-term ROA.

Plans to maintain disciplined capital allocation, focusing on high-return opportunities while managing growth.

4Bad News, Challenges, or Points of Concern

Alternative investment income underperformed, with annualized returns at 7% compared to a long-term expectation of 10%.

Potential variability in earnings due to fluctuations in surrender charges and prepayment fees.

Market conditions may lead to lower MYGA sales as the company prioritizes capital allocation to more attractive products.

Concerns regarding the valuation of the company, trading at a significant discount to book value, reflecting market skepticism about future performance.

5Notable Q&A Insights

Management expressed confidence in their investment portfolio, noting low exposure to disruptive sectors and strong credit quality.

The company is capital independent, with sufficient capital to support growth without reliance on external funding.

Management acknowledged the need for continued communication to clarify the value of their fee-based business and address market concerns.

The Q&A highlighted the importance of maintaining flexibility in capital allocation amidst changing market conditions, particularly regarding MYGA and alternative investments. Overall, F&G Annuities & Life, Inc. reported strong financial performance in 2025, with a clear strategic focus on transitioning to a more fee-based model while navigating potential market challenges and maintaining a robust capital position.