Q3 2024 Brighthouse Financial Inc Earnings Call Transcript
Key Points
- Brighthouse Financial Inc (BHF) made progress on strategic initiatives to improve capital efficiency and unlock capital, aiming to return the RBC ratio to the target range of 400% to 450%.
- The company is in the final stages of a reinsurance agreement expected to enhance the RBC ratio, with completion anticipated before year-end.
- Brighthouse Financial Inc (BHF) reported strong sales results, with total annuity sales reaching $7.8 billion year-to-date, consistent with the previous year.
- The Shield annuity products saw a 15% increase in sales over 2023, marking a record level for the company.
- Corporate expenses decreased by 5% year-over-year, demonstrating effective expense management.
- The RBC ratio remains under pressure, estimated between 365% and 385%, below the target range, due to new business strain and changes in the interest rate environment.
- Normalized statutory earnings were negatively impacted by new business strain, leading to a statutory loss of approximately $300 million in the quarter.
- The company experienced lower alternative investment returns, with a yield of 1.6% in the quarter, below the expected annual return range of 9% to 11%.
- The in-force block of business still had a negative impact on the RBC ratio, despite the growth in Shield sales and the runoff of legacy business.
- There is uncertainty around the timing and impact of future reinsurance deals and the development of a revised hedging strategy for the in-force block, which may extend into 2025.
Good morning, ladies and gentlemen, and welcome to Brighthouse Financial's third-quarter 2024 earnings conference call. My name is Michelle, and I will be your coordinator today. (Operator Instructions) As a reminder, this conference is being recorded for replay purposes.
I would now like to turn the presentation over to Dana Amante, Head of Investor Relations. Ms. Amante, please proceed.
Thank you, and good morning. Welcome to Brighthouse Financial's third-quarter 2024 earnings call. Materials for today's call were released last night and can be found on the Investor Relations section of our website. We encourage you to review all of these materials.
Today, you will hear from Eric Steigerwalt, our President and Chief Executive Officer; and Ed Spehar, our Chief Financial Officer. Following our prepared remarks, we will open the call up for a question-and-answer period. Also here with us today to participate in the discussions are Myles Lambert, our Chief Distribution and
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