F&G Annuities Reports Record AUM and Sales Growth

F&G Annuities & Life Inc ((FG)) has held its Q3 earnings call. Read on for the main highlights of the call.

F&G Annuities & Life Inc’s recent earnings call painted a picture of strong financial performance, marked by record assets under management (AUM) and impressive sales growth. The company showcased significant improvements in core financial metrics and an expansion in fee-based income. Despite facing challenges with alternative investment income and increased amortization expenses, the positive aspects of the financial results and strategic growth initiatives overshadowed these concerns.

Record AUM and Strong Sales Performance

F&G reported a record $71.4 billion of AUM before flow reinsurance at the end of the third quarter, reflecting a 14% increase compared to the same period in 2024. The company achieved $4.2 billion in gross sales during the third quarter, marking one of its best sales quarters in history.

Growth in Core and Opportunistic Sales

The company saw significant growth in both core and opportunistic sales. Core sales, which include indexed annuities, index life, and pension risk transfer, totaled $2.2 billion in the third quarter. Opportunistic sales also reached $2 billion, with notable achievements in funding agreements and MYGA sales.

Improved Financial Metrics

F&G’s adjusted net earnings for the third quarter were $165 million, or $1.22 per share. The company’s adjusted return on equity was 8.8%, and the adjusted return on assets remained stable at 92 basis points.

Expansion of Fee-Based Income

Fee income from accretive flow reinsurance grew by 46% over the first nine months of 2024. The introduction of a new reinsurance sidecar supports F&G’s capital-light, high-margin business model.

Dividend Increase

Reflecting the benefits of its capital-light model, F&G increased its dividend by 13.6%.

Challenges with Alternative Investment Income

Alternative investment income fell short of expectations, amounting to $67 million or $0.48 per share below management’s long-term expected return for the quarter.

Increased Amortization Expense

The company experienced a $6 million after-tax increase in amortization expense in the third quarter due to an actuarial assumption review, with expectations of higher amortization over the next year.

Tighter Competition in MYGA Sales

F&G noted tighter competition in the MYGA market, which could impact sales volumes depending on market economics.

Forward-Looking Guidance

During the third quarter earnings call, F&G highlighted robust results, including a record $71.4 billion in AUM before flow reinsurance, a 14% increase from the previous year. The company expects continued growth in AUM and aims to expand adjusted return on assets (ROA) and return on equity (ROE) in the coming years.

In summary, F&G Annuities & Life Inc’s earnings call conveyed a positive sentiment, underscored by record AUM, strong sales performance, and strategic growth initiatives. While challenges with alternative investment income and amortization expenses were noted, the overall outlook remains optimistic with expectations of continued growth in key financial metrics.