Corebridge Financial (CRBG) 9 Nov 222022 Q3 Earnings call transcript

Hello, and welcome to the Corebridge Financial Third Quarter 2022 Earnings Call. My name is Lauren, and I will be coordinating your call today. [Operator Instructions]

I will now hand you over to your host, Josh Smith, Head of Investor Relations, to begin. Josh, please go ahead.

welcome Financial's and update. quarter everyone, morning, to third Corebridge earnings Good

future and remarks which expectations. statements uncertainties. of statements, contain are or subject guarantees Today's forward-looking and are may management's based are upon to risks not performance current events These

filings required details important if by under securities Corebridge may SEC the factors to differ no provide or estimates or management's change. is update or statements actual applicable circumstances results events the any obligation materially. with that Corebridge's should on cause Except forward-looking to as laws, opinions

Additionally, on The and in supplement today's most website our our measures remarks comparable may of the available financial release, earnings refer at to www.corebridgefinancial.com. presentation, non-GAAP financial to included earnings reconciliation all measures. GAAP of is figures are such which

like I to the Hogan. call CEO, that, our would turn over Kevin to With now

you for Corebridge Elias Good joining Officer. Financial Financial. morning, am first as Habayeb, joined I for and today by earnings Chief call thank us our our

a New to This that Over diligently own their company. to and worked XX the culminated September on Stock partners reaching this of listing in like contributions standalone with I Exchange. were last would start X the all a our thanking to for our various successful company great number by our York those become parent team, public involved people Corebridge AIG milestone. Financial our position from of years,

results, strong questions. we provide financial update financial our on then provide our will our I take current to progress stated call, today's will our detail During strategic on will Elias and on commitment an and reinforce targets, financial additional market focus and performance position. conditions, recent financial review our

our am significant strategies. very market. We for a made future. We dynamic and was both delivered progress in confident good I core on quarter quarter with sales solid the our third in results pleased Financial. Corebridge The our

of return an on we capital pace to Our attractive remains are and strong, sheet to balance deliver shareholders.

average adjusted $X.XX with earnings of businesses or macroeconomic from This across equity, face challenging industry. X.X%. the reported operating of a core return third of results per quarter, that share felt ROAE, our was our Corebridge the in strong for on an adjusted environment reflects

dynamics, the interest increased market rates equity such affected widened to resulting in reductions in spreads, the pullback of and quarter. value Recent as our asset markets, different credit and each degrees businesses

However, to impacts and by on has short-term driving I interest time that that growth. should we impact expect be we from emphasize rates upside margin than sales offset long-term want that the market-related experienced rising over more the and

these year-over-year last leading new from to a benefits to conditions investment emerge spread point, began The to quarter, X where inflection tailwind. a and an turned of points historical base headwind net basis strong business compression finally XX supporting from to generation

Elias seeing the now spread development. We years. are in first provide expansion more time this will details on for emerging important

Turning we disciplined disclosed of the strong and a of targets them each we We sheet growth. balance maintain financial remain the confident to achieving IPO. deliver in as as part

XX% to sight We an after-tax XX% ratio adjusted adjusted XX% payout have the XX on from within on line XX% income of delivering and a achieving of months clear a IPO. ROAE to operating

with a capital to share $XXX through in deliver expect shareholders dividends, annual combination of our million We to along repurchases.

quarter the quarterly We flexibility the first dividend. our payable capital return complement committed have our shareholders to declared as with additional financial we already dividend XXXX. and have early second an paid to to of have as and to expect quarterly of annual dividend And second our

the the consistency company of earnings ability strength businesses sources. cash execute balance our our Our capital the and in insurance strategy flows management of our is and to based diversification on our sheet,

partnerships investment made quarter, third also significant and progress on growth, the organic efficiency During we strategies.

strong assets a the quarter by supported delivered of by organic deposit to and were Blackstone. growth our quarter, year-over-year sales with in X All we and originated businesses all robust As X delivered flows. growth,

Our multiple earnings, sources network of represent advantage. of strategic diversified and distribution a partners product platform

profitable risk-adjusted and customer pursue growth returns opportunities to able under most market are attractive the where focusing by are greatest various organic needs We conditions. the

of index quarter third across and demonstrated of index for our deposits channels, attractive range nimble ability products. our and evolve, our to appealing between positive as our this pivot company products, billion. of The $X.X for quarter remain $X.X business income set again both and our spread-based such markets driving spread-based sales products as conditions more annuities. Fixed and delivered broad for accumulation our billion, and and we fee-based fixed annuity in once record were supported We flows over opportunities very to with by capital fixed a policyholders net

The $X business, and strong XX performance of our of fixed and retirement, us yielded core over billion index a net for has consistent position annuity individual flows last over product months. the positive

bank approximately attractive, our in by further for the assets, and remain annuity also attractive billion of position ability $X.X consecutive to originate mobilize continue we Fixed supported where third to fixed strong sales distribution to were Blackstone's annuity leading conditions quarter.

deposits delivered growth $X.X reflecting billion of the for year-over-year quarter, and $XXX of over positive X-month period. flows XX% the retirement individual million nearly net Overall,

than out-of-plan at growth annuities. quarter, fixed in also plan new of higher year were in deposits deposits, billion, Retirement, by in prior particular, supported Group strong the $X part and acquisitions In XX%

Turning to Life Insurance.

premiums remain they the and in deposits growth growth U.S. an in prospects. continuing mix While trend business about the our we and reflect where a year-over-year, international were U.K., optimistic consistent of improving

face of focused on the U.S. to transfer billion, value originated uncertainty. lastly, And remains transfer million wraps saw stable robust. in in With had remain for many U.K. funding our We strong of we pipeline pension plan full attractive Institutional in inflows of the market Markets, risk terminations transactions and plans, risk and levels issuance GIC pension $X $XXX

in GICs become more in a to remain the issuer also confident We our consistent future. ability of

conditions effectively as able have advantageous, and appetites. respond been channels investor has especially been market Our across we to position broad changing rapidly products and to

good partnerships also BlackRock. implementing our investment Blackstone and making We progress both in with are

competitiveness not First, achieve, supporting originate previously attractive duration our to growth. spectrum we continues that and across and product could Blackstone recent the assets volumes

running The with billion and an originated To XXXX managing Blackstone quality an proceeds has $X gross and of assets of of at private average those transferred date, partnership reinvesting end Blackstone billion the $XX structured yield at approximately assets. we well, from of average credit X% that of credit BBB+. and is

in of is our pipeline origination new that of supported positioned part annuities opportunities. pension This support shorter-dated has our growth to transfer mix is and risk asset the strong

well billion and in assets representing BlackRock, in $XX private market $XX amortized of ahead some value. to securities, respect transfer schedule billion original we cost the public to liquid are With and our

As substantially completed these of asset today, we transfers. have

will platform, Aladdin us also We are in project product and provide planning further capabilities. stages infrastructure of expanded our modernize -- with analytics and the the which accounting

also business, towards are operating In addition our leaner to a driving modernizing model. we

known infrastructure and reduction modernizing Corebridge real various expense initiatives such rationalizing and estate refining current program, productivity target our operating Our footprint. as our includes model, leveraging as partnerships, our IT Forward, our outsourcing

rate It to achieved is next expected the savings with million run years. of within X generate on basis, approximately majority the $XXX a

million information savings the our on and of program. run original have have made Forward $XXX million of year. the achieved of Elias Corebridge savings by the of $XXX over initial rate end ahead year-to-date, plan We provide meaningful to more the achieve just already progress will

balance the sheet. to Turning

capital, recent $X conditions. companies payments and tax have our and billion positions dividends strategies. strong, Our market tied despite of remain Year-to-date, tax-sharing liquidity to insurance leverage distributed

Our strong financial are on deliver on commitments. stated that position our us gives confidence we to the path

opportunities current what about and for our excited We are future the Corebridge. holds

in memory We from the strong some are most tailwinds as rate rising recent attractive well interest as conditions gaining momentum of generated pricing by the environment.

the positioned our capital time, delivering while, commitments of advantage well opportunities take are moving to shareholders. to on forward We these same at

turn to call now Elias. the will I over

as results you, provide Thank performance morning. the and few well about key on financial updates our good fourth I as quarter. details a Kevin, and more metrics will

during the diversified strong XX% competitive growth deposits businesses. our quarter performance the our of year-over-year. our with premiums We strength and in offerings, Corebridge's increasing demonstrates product delivered franchise the power of third and

of many year-over-year well the a in a We yield in further this new basis. and net a represents towards In trend sequential first well in on income. base in on both base the retirement expanded as addition, growth our years, as investment believe our spread companies insurance the our spread for as as basis time businesses base

made maintain continues healthy insurance in companies approximate total to prior sheet year RBC the balance cash X a the to this target and by distributions buffer distributed entire year. the Our months first of ratio in our our flows the

$X.XX. This morning, EPS $X.XX, which of X.X% of notable operating we lowered ROAE adjusted and that operating reported our includes EPS by items quarter third

on provided losses available website. mortality In investment Page $X.XX, quarter earnings returns amounted the to below approximately of COVID alternative Details by on long-term $X.XX. are addition, expectations in the X our presentation were and

income, in divestitures APTOI of with operating was associated capitalization amortization, well APTOI, the decrease or the $XXX million was approximately million by $XXX DAC approximately Corebridge debt a investment fee market $XXX The changes impact driven below XXXX. income, Adjusted to as conditions in reduction SOP reserves year due million, structural XX-X variable completed as on and ago. of pretax income, and a

spread in increasing the comparatively annual a This by and assumption mortality review. improving impact base offset lower better income, expenses part actuarial overall from was experience,

excluding our earnings, earnings, when strength you which up readily diversification of source of The and year-over-year grew apparent of year-over-year. Base largest after our are earnings which income, investment X% variable income. spread is earnings. to core X% Turning power down is break sources our

rates Blackstone more increase reinvested we've emerge of benefits our approximately as to points, yields. higher Since of beginning year, longer spread The the higher lasting this new more basis new the a with tailwind investment rates XXX with presenting for base partnership continue money seen income. future our portfolio to earn-in is quarters strong by during at of and money

due underlying equity recent our Fee prior partially as the XX% to income source Fee asset income valuations income, recover expected versus is earnings, in increase. function fixed year asset and fee valuations. valuations. asset income is quarter of largest second declines to a And declined of

which primarily due to Life improving XX% excluding investment mortality variable margin, income, rose Underwriting from our is derived year-over-year experience. business,

reset on points income, The sequentially. includes to was by improvement yield, like at base for points I a floating X and up rate X.XX% the would was The basis combination higher growth activities focus base respect on was rates, basis XX was portfolio. net factors overall of and that positions year-over-year yield the yield which of to reinvestment driven With investment base up our quarter.

having in quarter approximately X%, XXX we XXX rates year approximately first the by achieved years. year-over-year exceed for and basis money the Accordingly, yields New time base basis the points. points expansion the since have were increased spread many of now in beginning

the of base on sequential increase expect new to and from to yield rates we including spreads. rate our the while rates continue benefit higher variables, money of forward, and quantum depend floating number will Looking a resets, the

Next, our I want program. to provide Forward, you expense reduction an Corebridge on productivity update and

as achieved we of million September Corebridge rate of $XXX already of As Forward million part as nearly Kevin $XXX over the savings we've indicated, IPO. that of our from XX, run disclosed

expense headcount majority represent date the to includes savings approximately reductions separate million of a to against incremental of $XXX The company. costs achieved our which the be baseline,

onetime a to estimate to the savings be component rate run million other in line. and the we've restructuring incurred $XXX continue below the costs We million program of achieve range. is which in as $XXX costs, cost reported To to date, million of the $XX total

to still the expect able we in expenses note in $XX would corporate IPO. million the quarter to while kicked our that, increase certain of in fourth eliminate to with the as some we've expected I expenses expenses, been corporate increase approximately

of Year-to-date, million we $XXX to to our below investment million the total the about costs onetime of the separation terms which cost continue $XXX estimate million $XXX AIG, range, the component from Forward. of Corebridge In estimate we've separation are complete as separation for will in reported to line. to million efforts addition $XXX a achieve be costs, to in incurred that separation

the prior pretax in Turning X in compared pretax quarter to million actuarial income the to a $XXX million assumption income reduction as the in $XXX prior year Page operating million third year adjusted third impact minimis in reduction and by versus our de had the $XX review to lowered quarter. annual presentation. quarter in The

this adjustments reserve significant no were quarter. There

than Specifically, representing for changes universal there with reserve net portfolio less secondary our no of is small which life to were us, liabilities. a X% guarantees,

assumptions lapse secondary with continue our reasonable universal believe guarantees and rate We are life supportable. to for

a approximately relatively performed rise of a statutory short we lapses GAAP, assume new over I impact time the significant rates lapse up U.S. rising results not does we positive also purposes. For assume lapse note a of of review rates The amortization. X% ultimate in interest quarter annual actuarial on of the in rates annual third reflect principally period X%, the assumption potential while the the reflect for margins. modest driving of would business expected resulting rates, assumption that in acceleration of annuity fixed interest impact review DAC

Moving largest on our begin Individual segment, I'll with our businesses, to Retirement.

sources, fee due points asset terms driven spread year-over-year investment income In nearly the was points basis XX while and last earnings base by X% year-over-year of net lower basis. X core up year increased expansion, spreads to valuations. by spread XX% over Base declined basis income on a sequentially

We're index Individual and annuity collective books. growth for Retirement of environment encouraged fixed fixed the by the operating and our

to portfolio new net profitability. spreads positive improve Our expanding and flows, strong continue business margins

this segment a Kevin our As pivot advantage. ability spread-based between in to products is strategic fee-based noted, and

base due lower Retirement sequentially X% Fee year-over-year declined due on year-over-year net Base expansion. basis valuation. and asset basis. spreads rose spread X by income points Retirement, approximately increased XX Group last to Similar to the income points investment spreads to year basis over XX% Individual a

In Insurance experience significant This year-on-year. on business, was increase quarter both margin in terms underwriting improved driven excluding Life improved our variable and income, of a by investment results, basis. COVID XX% mortality third non-COVID in underwriting margin

quarter expectations. provided with second third sensitivity, mortality of Our million consistent and previously quarter COVID our non-COVID emerged were line in our to losses favorable while with largely $XX the

as to as of spread earnings stable. income margins in risk versus increased pension Fee business, well our relatively In a ago year base transfer the portfolio for underwriting income due terms expansion. and spread XX% Markets Institutional were sources growth

to by encouraged which the strong profitability. spreads, growth, growth Markets, improve consistent of reserve We're Institutional continue and margins expect business reflecting expanding new will we

quarter. $XX.XX the realized gains like comments September some from now of about or XX growth and up X% to the per net $XX.X would I reflects billion reported was value share, liquidity. below as our This second our capital well as book provide earnings Adjusted as line.

Fleet Our of Life XXXX distributions range XXX%. the remains of company previous our our RBC cash generally because is from is to to Life with quarter Fleet in XXX% XXX%, third line the to quarter. Corebridge's by holding target to for of liquidity. down principally timing decision This insurance made our the quarter year-end establish The subsidiaries estimate third above in adjustments certain accelerate RBC We reflecting items. be

have billion, the which normalized of distributed $X to which the months for is XXXX, X the For XX comparable our insurance of full distributions companies approximately months billion. XXXX, were $X.X

accelerated period distributions increasing ]. [ decline RBC generation Life the a accounted This activity. market total, the for year, had insurance actual Fleet XX beginning XX company XX we a to an points points the of capital XX to compares points decline volatility during of the XX (sic) which positive of since In significant and for demonstrates of to sales

basis leverage towards points ratio comes $X was XX Corebridge's roughly we've September of steps company The billion, both in finalizing and structure. increase taken capital liquidity holding as leverage financial Our as was XX. XX.X%, our the

our continue book not balance as We and a value XXXX. of delever will maturity that expect naturally next sheet our until to is growth, debt result

IPO a price. paid our X% on we We into will dividend million This dividend public dividend, $XXX the yield December first quarterly our fourth over declared upon yesterday, in paid translates company and based which dividend be October, XX. quarter

change shareholders, do quarterly ability aggregating to market deliver dividends XXXX. intend not management capital per shareholders in including We approximately nor to $XXX to our capital beginning to Recent they our continue million alter conditions of plan, that to year. million dividend beyond paying a $XXX dividend, do our returning approximately

adjustment of reflects LDTI, GAAP shareholders' $X the a is an of in This value LDTI $X earnings. that's to estimate billion January balance offset book XXXX, of to This as reduction the reduction end to partially billion impact our of the closer by in X, initial range limited benefit net diversified adopt sheet. transition range respect of bottom equity. increase the represents pretax With a retained having of AOCI previously our to disclosed to

changes our current results accounting life in In to for DAC addition, and insurance given operating volatility expect risk market products. benefits, the LDTI reduce we to

an advance XXXX, also will we the LDTI insurance does in additional of report we quarter flows. provide it's not for to -- of it's on While that statutory information LDTI our time first first remember basis our impact nor also the remember company cash important results

on look mostly markets. on variable alternative investment as correlation our to we As are continued to investments pressure we fourth quarter, a expect and X a quarter reported equity the have lag high income,

mortgage as time, of will Also million. fully same the quarter keep which income the our fourth well full call-and-tender that EPS diluted continued compensation, prepayment levels stock-based in depressed our mind commercial as we approximately result include we of of employee loan activity. $XXX shares estimate in will At expect impact

To progress to base earnings, improve of sheet. We remain by environment, market mortality increasing the evidenced the in strategies our third the our our very strength quarter Corebridge wrap current spread up, we're as robust we're favorable liquidity the good produced profitability. pleased with a confident and capital, context experience. and In and making balance on of resiliency income sales,

it I now Kevin. will hand to And back

we're now Thank you. prepared And questions. for operator,

[Operator from Piper John Instructions] Sandler. question from first comes Barnidge Our

experience, pre-COVID did XQ is in about insurance maybe seasonality improvement experience. the the non-COVID mortality normal you Can about return domestically? talked And in at business mortality quarter life best You were the least talk of then world mortality? a where for

it. John. Thanks, Yes. Appreciate

a held range. losses again the COVID for all, were has for earnings, third every once we to that And comes of pandemic, projected to sensitivity million $XX it And deaths million XXX,XXX has the in quarter, within of the indeed, sensitivity up. $XX not event. population event down from been of of beginning the when on first mortality, our So whole us capital COVID

the And in, better quarter noting the all so levels. including COVID COVID, expected our was pricing activity, mortality, than third

well, So that in the than a our mortality we've row the and quarter had perform second to pricing non-COVID also that's mortality expectations. better continued all-in

And need we've to change of quarter that as we data our assumptions. part mortality, review, look the third no the at seen suggests long-term as

consider was hold our exception, expect sensitivity So to we the to and up. event do that the COVID continue we

serve unpredictable. we valid. as holds is future to of the expect in COVID event there that And our be for prepared some we'll kind sensitivity remains our activity, the remain in to then customers resurgence What would always have. We

And from It seems for talk year about was can back-to-school this perspective? like for first VALIC a you XXXX. question, back-to-school distribution since my season follow-up the normal

Group So our extremely positioned. Retirement business is well

been and surveys in this know, platform, have We to that upgraded and plan years, you of for the sponsor by plan as dramatically has external both as done relative investing we've participant experience, X there. capabilities some noted the are been last our

had And and growth the in we deposits strong very in great where is VALIC, a XX% business year-over-year, positioned. about feel

really the that the we plans the role focus of adviser. the of those and know, As the we you on emphasize value value of adviser, role

And on acquisition new as well increasing strong as plan track we're periodic in deposits. for year a

feel is business VALIC, for the very well season and school the So start we to the about great positioned strategically.

platform. GMIRs all would in outflows Now or interest our dollar flows, flow those. most all actually to in equal. is terms are of above inflows on above because first attractive in I brokerage VALIC guaranteed of say advisory X%, Not below X% want and And rate of whereas of every it our the very we business on get VALIC, are right, I just of is minimum the that thing comment questions X%,

include year-to-date. amounted assets $XXX as right, brokerage flow in platform, our stated third and Q, net which the and new in $X.X the advisory in definition the And quarter billion to million doesn't net we

flows, despite is quality overall fact the that inflows outflows, of economic our So the improving. reported the the

question next comes Our from

[Audio Gap]

or [indiscernible] the after Operation overall that that buybacks start levels would your you're -- own AIG or or capital or from otherwise environment watching buybacks.

Yes. Thanks, Jimmy.

confident public we So XX% achieving very to and good months. our targets, look, think start financial as to what a in in we're we're off is company, XX% XX ROE a

strategies underlying the to significant that on executing achieve making are progress. and We

multiple that us years. model to Our the the and we diversified demonstrating long some at multiple have channels spread this, sources for managing have we products, business a that businesses, time our and the which of facilitated pivot seen in most we've are a earnings attractive value history of margins like which shows great in to

of is environment. active have levers achieve we to But management. capital plan, expense overall of many reduction our upside little part participation our touched order which in our that is strategy, rate investment it our in of obviously Elias on is is Part pull it Part to targets. this and Part a that the of bit.

these single quarter financial every our all excellent And us We in engage every the to beyond don't doing for in to of so. we we're have share levers. repurchases need next dividend lever the by year, second making have against be progress flexibility successful commitment. for And order confidence to in of

interest is then reported And everybody. benefiting have environment lot of in Okay. individual flows flows, just rate higher a retirement your benefit the of of the rates. the companies very terms in strong obviously, with interest annuity Because market? fixed is competition How

are the Or seeing get is terms conditions human with companies market more and still some higher given rational? So yields? aggressive you

in So comfortable our with we're fixed very annuity. position

our good managing and been about important to experience. deep portfolio our fixed so you level business, expertise a components. a of there's competitive in time, We successful annuity it's of As order one really in strengths. feel we be position X a participant And have over we've know, long because this

able have needs. relationships to be to respond to and distribution order you First, in have to the products the market

The in to behavior, second and including spreads changing rates especially credit interest understand really of investor is have surrenders, appetites. face you and policyholder the

rates important when changing rate is accepting opposed as the very manage a a making expected And rising, to crediting it's strategy. as a time And important like to rates the proactively very underlying rise. at right economic and crediting third are understand lapses choice is are especially to of a lapse economics. element this The to the

margins And crediting the to relative are asset we've increasing that prepared appropriate. relative be frankly, lapse to the the the rate many are fourth most position to activities the attractive to we rates. then support liquidity, seeing years. managing the And portfolio in is that well And now we're right are that in seen

competition date. irrational seen are The attractive. to haven't we margins very So

We the the margins that now, are the extent conditions micro cycles can And change crediting that we still rapidly we this to our exist. continue attractive in business. have they see ability so compete rates, in to as

Okay. If quick ask one I could just one. other

You had there from with of a items AIG. $XX the million that Is done? unwind more could impact in periods? all Or future be securitizations similar

Elias?

Elias. Jimmy, it's

trailing there is into be going So to impact a the fourth quarter, it. but that's

amount? similar A Okay.

small It's quarter. the there. mostly mark-to-market where be could see quarter fourth -- fourth to quarter it a we in in be have ends We're will it. gain, with from It the It's done but the unwinding.

Our Morgan comes Nigel next from Dally question from Stanley.

investment your repositioning. on Question portfolio

You you're of regards with plan to ahead transferring assets to Blackstone. commented that

to benefit incremental in upside we your should yield? to is already expect? So Or there just additional the clarify, those wanted resets base is

assets So needed originating that The mix working our relationship and part a our with to Blackstone support important asset partnership an strong of start the they're and new well, to are is excellent. really off our business. is

I -- the we're the would and say us transferred are billion great far. doing job $XX to and them, we've reinvesting $XX they're so billion what for a

a and where this maybe where Elias, you this go. we're unpack little bit see can seeing So we just

know, to transferred as $XX Blackstone. we Nigel, so you billion

year-to-date, principal billion end they're the they've downs. On the $XX And the invested through for billion, us $X reinvesting of about pay original September.

a there's partnership, to value of longer look and it is the more in. I So at this beginning come that

on year-to-date at if X%. billion basis, the us, for gross been the about But yield a they $XX invested original look has you

comes So do I is that by. to in, time starting component earn as expect more but

a the quarter that's I combination that's I think floating at on from higher would And well money now. from as of it, quarter as put maturing of, base new increase rate coming second unpack money resets We right into growth. the to into it. the also coming it's portfolio subject third the reinvesting that's a significant had yield. It's yields

November, stage. that up map, And annual in the still the allocated Come next course over is start the allocating the first that brings would at months. Blackstone but it's billion, Blackstone being $X.X of infant in we -- to would value XX which Blackstone the the picked be

here. on our to their so from what And increase impact just going is portfolio

Got as I Just million out it. well. million reduction. there good color. linear, relatively $XXX has That's any little back-end for the been follow achieved. on a additional of up wanted $XXX color loaded? Timing the just remainder, expense on to

it we're from ago. we ahead just expect of few be So a to where schedule months

to and $XXX Our of little the end year. of million by we got to actually ahead get September, target the was million. of million $XXX of $XXX end by there a And we're the this the

can the to the we the get before, will that in programs, so to to expect similar we're of $XXX We is from the opportunities the continue next a on majority be accelerate million the sooner. of would efficiencies and we benefit done the line run for be rate the which IPO, months XX that time provided And basis. looking always

from Research. next Autonomous Our Bass Erik from comes question

see color guess, if the was XX I the here. inflection could this over hold around nice months, spread what give interest quarter. So I of for base certainly improvement to rates the some next hoping just base you expect spreads in you'd magnitude

thanks. Erik, sure. Yes,

our the where So to as choices where diversification pivot, mean, model to now. look, of most I the business right definitely the have risk-adjusted where for we paying us attractive off returns is

the tender prepay net offset The markets. in of and of the the of net on fees any from equity of call enough from to is more a environment, activity fees upside than and impact reduced crediting, rate reductions net

what uplift $XXX very are a yielding right to. XXX the in points attractive. as year in point X can margins seeing million now, we're $XXX and basis conditions-wise, linear sensitivity, X year externally, The you million And sensitivity the that

event were need very an certainly the in pull environment this which be to to conditions levers seeing now. successful. multiple have to We change. don't the environment But we're We like in that attractive external

out, up base yield. and start XXX money the basis XXX That's into we're it seeing beginning X% over pointed We're now to points since rates our the average. the base come spreads. new year, on Elias As the of are up basis points

not that in upward is certainly the going to Now change the like Elias in there spreads, and And out, is an base the pointed be expect resets floating rate direction. things the as spread but we included change in some linear. base

would I echo that. Yes,

with is environment the our income current to Our expectation increase. market will base spread continue

Our this benefit environment. to continue net spreads base will from

to -- the But is the proxy. sensitivities point the Now improvement on and the number their variables. depend think looking from a going I this of quantum good is at of

you're for it. of level of XXXX? Got just return current talk excess then in capital about kind about you're that thinking carrying you can And positions capital how you that and the how

capital liquidity Look, in position. Yes. strong we're position, a strong

have And significant spread positions, We philosophy. our our while growth And created our strong RBC target. capital about we're above management these we intentional businesses. very in supporting

our begun We're committed already deliver payable dividends, quarterly, we've to year, on that. and to a $XXX million

We the have share financial year, second engage engage expect of activity. especially the flexibility to in any in by to quarter secondary next AIG event repurchases in to the that were

have new we on And are risk-adjusted attractive business also and highest. where invest the financial very to in returns this the flexibility focus the

our that's so philosophy. And

Elias, add I anything. if don't want know, to you

profile. we Erik, as does where our our We parent covered capital you kind think of leverage of stand philosophy feel are when our our liquidity think very real And look at and target, but today. position we well well. to as where the with the relative capital, I comfortable we

we over helped about when collectively, kind So a given the we sheet 'XX. of balance we're into sideways, go of comfortable diversified the strong markets and earnings sources, in feel us and it And going feel our which time position. have nature

one follow-up. technical quick just And

from for to something buybacks. it, technical XQ You that? prohibit you Is being mentioned that market there in doing the 'XX prior would

be there. So we're our working through to position

perspective, do call, chooses earnings to Peter As if to beyond to secondary X May. said technical in table participate from windows. the X the position we're us, for March working next either in those nothing of our are -- AIG be And all prioritizing capital. the to windows a go on options than just or are But on AIG a But the there's other that.

Jefferies. Kamath comes from Our from next question Suneet

to number year-to-date with another out distributions you caused And line that Just in being wanted subsidiaries year, higher? fourth on ask on unusual to anticipating taking made anything of be billion the of year-to-date quarter? the sort your you in the are distribution $X last was that basis there that from

Elias. it's Suneet, So

onetime given for distributions and knew separation with liquidity, needed establish program. done had expense to by knew a we the parent 'XX So in design were we our we we expenses strong

RBC And where up -- we why And of the given we comfortable at it. design end with we front-loaded felt we with front-loaded that. of an it's ended by so So 'XX, XXXX -- kind it. that's

We entire the did pretty for $X.X we distribution we're what of do but XXXX. about quarter, close the was expect That billion. fourth another year to in

may close not So in we're ZIP a big it code, be so distribution. pretty the

you maybe And doing basis thoughts did reserves of a can it. on review, that you're in Because AAT get -- capital? on anything Got assuming could as terms assumption there just is what like year-end of your tailwind any remind you last And we into I'm up guys then that impact fourth put could that a level statutory us be quarter. year?

that. let me So take

the quarter quarter. don't third GAAP, up could done do flow year, for have follow fourth but we've What there. we we is in the up what we're most done number the that and stat, we the gets standard the actuarial I that. of testing So year-end stuff put for last on cash done so have in we for left -- of

from from next Our comes Michael Citi. Ward question

parent I of years. several you think you incorporated on like the you was of wondering about see ownership over have ultimate comment do as ownership level time next you company or your I your plan, if AIG over trending how in guess, any could kind involvement it? the

that's not Well, question so much I mean, us. a for

AIG's terms and of I'd public that refer their in in are I intentions, to Peter's clear pretty those. disclosures think comments

-- refer other they whereby and I'd AIG's S-X. ownership rights different And evolve the disclosed add S-X, are levels the is how would Yes. over to the I pretty are thing in

Okay. that And maybe pension curious transfer, on competition about in risk the level of market. just

billion was of business, target, kind operating been PRT think like industry a of recently. wondering And $X some any accretion, not I for dollars like earnings ROA example, spot if bright sort. the for there's it's an per but of I of sensitivity

behind PRT. the If us understand could you help financials

lens. Well, with And cases, look medium-term has lenses. business at We we consistent appropriate targets. at at a business, a our look stat lens. and our like at lens. we in they're each an Michael, our We Sure. of And lens well. some economic all look relative gap hurdles those, We return all look look tax multiple as at to

is attractive a risk Pension for transfer us. very business

a we We years plan X-plus built full some ago, And on on terminations. focus to focus decided to administrative capability specific proprietary plan full terminations.

more fewer less And There's are competition. these There complex. are participants.

commodity the found they more And that margins oriented have longevity so attractive programs. than we more

circumstances, being we're reality funded. is the with more more current finding plans the fully and And

that the to U.S. plan in with full getting have urgency so larger, And and terminations companies the marketplaces. the are U.K. both derisk,

And a plan in very full terminations. pipeline seeing we're so strong

economics also across help pension transfer to a the to going expanding longevity And our attractive. support will the Blackstone take jumbo helpful spectrum, we us but also us We which tremendous their the frankly, partnership look is business. they're capabilities deals, because be haven't commodity our found at risk origination duration with

question next from comes Our Krueger KBW. Ryan from

driven Can much the on you point is base sequential other improvement the question relative help XX was impacts? to yield. of first how My by us the floaters basis understand

the but at are it's what's Ryan, pickup, for as overall, the quarter in in and business also yield, roughly the and given time. portfolio in new look we floaters just a being rates our short we by growth. reset, was at it, driven was said, of floating such The the That period as the being into it -- driven the look playing of that all half the we rate as being significant pretty when at well base sustainable different increase rates, factors -- that by higher NII, reinvestment Elias. not

a positive and billion, overall saw in and account Individual we both pickup in inflows general though of quarter, had Our north annuities, in Retirement. fixed the even surrenders Group $X

but And that review you related market were of equity was call the there didn't anything out, in assumption impacts Retirement the to weakness outside Great. Individual quarter? then any negative the in

Yes.

impact million, unpack That got annual if like an was actuarial to review. -- you $XX the the you've of got you've So Individual want Retirement, $XX million impact.

PE Also quarter, PE lag real the and last us were are -- X not in reflect hardly was They because variable down and they're investment quarter. activity tender there quarter are any on what happened also for and equity income, a primarily calling so estate.

So down. also that's

equity And of those markets XX-X, then and DAC quarter. closed sensitive the the where SOP end to with at respect equity markets, are to

were QX, year. much they relative expectation. weren't down They So to this the prior as in they're as but QX quarter impacted as as much below

DAC on 'XX restating an for change LDTI accounting be XX-X we'll going is and the and and to come Now 'XX be basis. to January, SOP

that things part improvement, from the look core, spread, base if business, meaningful of driven the through book we're XX% experiencing in new you this But in spread if comes you're quarter the a there. are the of the market. there earnings So by growth a driven income. number impacted the the than more at in seeing look the by you experiences, in higher money yields at that's part and the And

Can what SOP you you'd and expect? quantify impact DAC relative the to normally

and earnings XX-X. would about for of DAC have it because we in much would markets, million stable it put million higher the I SOP had roughly If $XX segment. was $XX

about in to smaller to X are that's markets thing add, manner. would and relative one just impacted there. million have are on Ryan, then Those in and say, And impact DAC that stable the segments Group, I SOP about, would be $XX we a top, on that

comes Greenspan Elyse next from Fargo. Wells Our from question

can My in deals? business? new there capital capital And upside if for to risk about you first question on would pension sales, talk PRT you think how you just requirements much the allocating transfer, how think about towards is

dividends, can of businesses that then So making flexibility sure as terms to the are in the a business. our invest out, And priorities the amount the capital fund to that roughly certain we our in the comparable. And across a our is have various of position pointed I we're capital in we mean, repurchases. management in strategy, I portfolios new intensity engage of capital, Elyse,

that needs on returns the customer where optimize the and highest risk-adjusted based will greatest. the the are where We are

now, very spread have right businesses attractive Now, margins.

risk And ensure in much will so we're we new than marginal be we capital opportunities fixed great very thoughtful transfers. about business optimizing that over-allocating. annuities in allocate we and to how annuities, pension index and also But see rather

through the come Okay. on majority cost of or will quarterly in falls the call in terms a saves term? And And corporate through basis? guys where that near on program, you by into of segments then should segment kind out the savings the the

it's Elyse, Elias.

the just well companies the insurance It's So corporate is the targeting corporate will to as the center, center across as benefit. not but savings board. the both

of coming our through is one come relationships expanding in it savings from our so example, is some we're seeing that. where -- Accenture, For of part operations, company will is of the with kind outsourcing and insurance we're where savings

consideration earnings in something but of give did so we it much transparency will provide on the far. the we We deck how can take the already kind under future, as savings to in

And last one. Okay. then one

level have something guys $X shares? in your you a at once have or billion You to that start you to just you're holdco. the pointing like back buying Is there guys times that normal

of yes, parent hold year's onetime some expenses in the X I the remarks. parent cover to the our liquidity referenced around is -- prepared the at So want we higher given philosophy beginning worth liquidity so to expenses. on enough Those of my are

cost. from external fixed the to in as these that, liquidity parent's of expenses, through part dividend cover expect would I And line shareholders to be we parent rate And consider work a more the the run that. as I

service primarily once So if you be and debt our get we about think it's onetime cost going with is our what done dividend the to we're will to expenses.

balance of result, come expect, So will the would parent, down over as I time. the a

distributions, been pretty we we look companies, our insurance know we're do you what if going But their at historically is to they've -- plan and to consistent. what we can

improve company, profitability of time may line we will to improve We and expect that repurchases. we over as return and what inside trend back insurance share is in form to that to excess the continue shareholders use

Okay.

Evercore. from from is question Tom Gallagher final Our

company to look way of liquidity math, holding what, the closer $X.X be maintain, a would grading X? first year then and I holdco follow-up we expect to liquidity do $X.X just in on about kind amount question a range in year you down year the Elias, directionally Is beyond in the like to on the that would to that billion a think that. it of that target what If to levels you'd are billion talking X about, say, $X of as let's targeting? billion for

be $XXX cost $XXX would debt about So million think Tom, the it, million way about is year. I our to service a

Our shareholders, to dividends $XXX million.

run sort say us I let's the would be billion. to go-forward that that's of rate $X.X That's holding. So expect

share in and we sorry, and my our now program. to about complete $XXX comments, million then, cost -- to from million have of of $XXX affect cost AIG, I our to million referenced Between separation had reduction $XXX the we about expense

the So to the now, we it have is to from fund plan fund parent. that. Right

be that, onetime end costs if done I largely XXXX. to So take of by you we the the expect think

blocks I think So what's factor of in, the to about. you building be the that that if number give should you right thinking

trade-off on That's do individual great. these X.X% looks very your follow-up but Yes, that that on up the wide moved forward? fixed Spreads is lapses gives moving you Or lapse this me need. quarter. My annuity blocks. the there, rate are to, Do are fund becoming like, more I you competitive need to start how as of side cost going see up? what

Tom. Yes. Thanks,

can one understanding behavior. lot that make changes lapses. accepting lapse pointed policyholder in things relative experience have economic credit a as the of changing rates crediting results lapse is benefit rates interest in of based a important So spreads. of we on that opposed we we And the decisions model the And and out, we model dynamic what believe this be have the do We around as to I business. will

we've that our actively monitor sense. rate crediting make well where model strategy are will So prepared. manage within continue is And to of we our environment seen economics relative to behavior what the is the which and the far, for we expectations

so now, expectations, and, that many are behaviors seeing we in well expectations flexibility there. our below our to But within cases, have continue we're right

to of irrespective relationships position the the what's inflows. tremendous And have and our business that, we also have, new distribution strong lapse originate is of I that think a because ability rate, important of we

And maybe the seeing can general beyond flows in rate lapse a little Elias, overall account. just where we're if unpack bit actual the the you

largely. forget over other look billion products if we general account Yes, and Individual the annuity you Between and both fixed into $X are the alone, account at inflows the Retirement the businesses, of you if the at two, look account. had annuity index general products the

not a on we the worried net or because we're have inflows. still liquidity perspective account from So disintermediation

insurance we've plus the liquidity got business, the growing in strong are companies. We

or And well support like Yes. we this, like because the anticipate whatnot anything environments to positioned relative liquidity, having asset since lapses. we're sales we're not to to engage in

now will I remarks. Kevin hand to you for back closing Hogan

of Okay. Thank with part us. your morning sharing you for

to in hard our journey The third possible it to towards as retirement future broad first as be quarter more step Financial, supported of suite each solutions Corebridge make works the not action for by day and was their people Corebridge our take goals I Thank pleased, and insurance could more products. you.

concludes call. you joining. Thank This for today's

your disconnect now lines. may You