F&G Annuities & Life Inc (NYSE:FG)

Q2 2026 F&G Annuities & Life Inc Earnings Call Transcript

Aug 6, 2026 / 01:00 PM GMT

Release Date Price: $29.18 (-1.59%)

Transcript 10-Q8-K

Key Points

Positve

Core retail sales of indexed annuities and indexed life reached $1.8 billion in Q2, one of the strongest quarters on record, despite industry FIA sales contraction.
Retained investment portfolio remains high-quality with 97% investment-grade fixed maturities, and fixed income yield increased to 4.91%, up 14 basis points from Q1.
Credit-related impairments remain low and stable, averaging 6 basis points over the past five years and just 2 basis points in the first half of 2026.
Operating expense ratio to AUM improved to 47 basis points, down from 48 basis points in Q1, with a target of 45 basis points by year-end 2027.
Capital position remains strong with $1 billion in capital generation from in-force business, multiple capital sources, and $120 million in opportunistic share repurchases at an average price of $26.44.
Added a new flow reinsurance partner in July, enhancing flexibility and supporting capital-light growth.
Book value per share excluding AOCI grew to $45.93, up 68% since the 2020 acquisition, reflecting strong shareholder value creation.
Management is exploring strategic alternatives for Peak Altitude to unlock intrinsic value, with potential to bring in a strategic partner for a majority stake.
Core spread remained consistent, and the company maintained disciplined pricing despite competitive market conditions.
Retained AUM grew to $55.9 billion, reflecting positive asset flows and strong momentum in core retail and institutional businesses.

Negative

Adjusted net earnings decreased to $85 million or $0.65 per share, down $25 million from Q1 and $18 million from Q2 2025, partly due to lower alternative investment returns.
Alternative investments income was $49 million, below the long-term expected return of 12%, with annualized returns of 5.9% in Q2, down from 8.3% in Q1.
The FG Life reinsurance transaction reduced incremental earnings by $8 million in Q2 compared to Q1, and by $12 million versus the prior year quarter.
Surrender charge fee income was lower, and other liability costs increased due to higher amortization expense, impacting margins.
Mortality experience was soft in the quarter, adding to earnings pressure.
MYGA sales have been de-emphasized due to returns below threshold, limiting growth in that product line.
PRT sales were muted in the first half, with only four modest deals, and the market may see less volume due to well-funded pension plans.
The company has limited buyback capacity remaining, with only $12-15 million left under the current authorization, and management does not expect to continue repurchases at the same pace.
The NAIC's adoption of higher capital charges on CLOs is expected to decrease RBC by approximately 10 points, before management actions.
Near-term alternative investment returns are expected to remain around 7-8%, below the long-term target, with no compelling argument for improvement in Q3.

Refinitiv StreetEvents Event Transcript
E D I T E D V E R S I O N

FG.N - F&G Annuities & Life Inc
Q2 2026 F&G Annuities & Life Inc Earnings Call
Aug 06, 2026 / 01:00PM GMT

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Presentation
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Unidentified_1 [1]
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Good morning and welcome to F&G's second quarter earnings call. During today's presentation, all callers will be placed in listen-only mode. Following management's prepared remarks, the conference will be opened for questions with instructions to follow at that time. I would now like to turn the call over to Lisa Foxworth. Worthy Parker, Senior Vice President, Investor and External Relations. Please go ahead.

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Unidentified_2 [2]
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Thanks, Operator, and welcome, everyone. I'm joined today by our new CEO and President, Connor Murphy,

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