Q2 2024 F&G Annuities & Life Inc Earnings Call Transcript
Key Points
- F&G Annuities & Life Inc (FG) reported a 21% increase in assets under management (AUM) before flow reinsurance, reaching $61.4 billion, driven by strong retail and pension risk transfer (PRT) sales.
- The company achieved record gross sales of $4.4 billion in the second quarter, marking a 47% increase over the prior year, with significant contributions from retail and institutional sales.
- Adjusted return on assets (ROA) excluding significant items expanded to 130 basis points, surpassing the baseline of 110 basis points set during the Investor Day.
- F&G's retained sales grew by 55% over the prior year quarter, reaching $3.4 billion, indicating strong demand for their products.
- The company increased its ownership stake in Freedom Equity Group to 100%, enhancing its own distribution strategy and positioning it for growth in multicultural markets.
- The company faces potential challenges from fluctuating interest rates, which could impact the attractiveness of their annuity products and investment income.
- There is a risk of elevated surrenders in the near term, particularly for fixed indexed annuities (FIA) that are outside of surrender charge periods.
- The floating rate asset portfolio has been reduced by two-thirds, which may limit earnings sensitivity to future interest rate movements.
- F&G's debt to capitalization ratio increased to 26.4%, slightly above their long-term target of 25%, due to recent refinancing activities.
- The company acknowledges potential spread compression in the investment portfolio, which could affect future profitability if market conditions change unfavorably.
Good morning, and welcome to the F&G's second quarter earnings conference call. (Operator Instructions) And as a reminder, this conference call is being recorded.
I would now like to turn the call over to Lisa Foxworthy-Parker, SVP, Investor and External Relations. Please go ahead.
Great. Thanks, operator, and welcome, everyone. Joining me today are Chris Blunt, Chief Executive Officer; and Wendy Young, Chief Financial Officer. We look forward to addressing your questions following our prepared remarks.
Today's earnings call may include forward-looking statements and projections under the Private Securities Litigation Reform Act, which do not guarantee future events or performance. We do not undertake any duty to revise or update such statements to reflect new information, subsequent events or changes in strategy. Please refer to our most recent SEC filings for a discussion of the factors that could cause actual results to
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