• Adjusted ROE: Achieved 12% to 14%, with a run rate ROE improvement of over 300 basis points.
• Payout Ratio: Exceeded target with a cumulative payout ratio of 73%, returning $4.9 billion to shareholders.
• Run Rate Operating EPS: Improved by 35%, with a quarterly run rate operating EPS increase of 11% year over year to $1.28.
• Full-Year Operating EPS: Increased by 18% year over year to $4.83.
• Premiums and Deposits: $41.7 billion in 2024, a 5% increase over 2023.
• Expense Reduction: Achieved $400 million in run rate savings, reducing expenses by 13% over two years.
• Fourth-Quarter Adjusted Pretax Operating Income: $878 million, with operating EPS of $1.23, an 18% increase year over year.
• Fee Income: Improved 10% year over year.
• Underwriting Margin: Improved 22% year over year.
• Base Spread Income: Declined 5% year over year.
• General Account Net Inflows: $1.6 billion in the fourth quarter, with full-year net inflows of $6.9 billion.
• Group Retirement Net Outflows: $3.5 billion in the fourth quarter.
• Life Insurance Operating Income: Increased more than 100% year over year.
• Institutional Markets Full-Year Earnings: Increased 17% year over year.
• Holding Company Liquidity: $2.2 billion at year-end.
• Life Fleet RBC Ratio: Estimated to be in the range of 420% to 430% at the end of 2024.

• Warning! GuruFocus has detected 8 Warning Signs with CRBG.

Release Date: February 13, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Corebridge Financial Inc (NYSE:CRBG) achieved or exceeded its financial goals, including an adjusted ROE of 12% to 14% and a payout ratio of 60% to 65%, supported by the Corebridge Forward efficiency program.
• The company reported a 35% improvement in quarterly run rate operating earnings per share, driven by earnings growth and capital management.
• Corebridge Financial Inc (NYSE:CRBG) returned $4.9 billion to shareholders since its IPO, with a cumulative payout ratio of 73%, and repurchased 14% of its outstanding shares.
• The company achieved $400 million in run rate savings ahead of schedule, reducing expenses by 13% on a comparable basis.
• Corebridge Financial Inc (NYSE:CRBG) increased full-year operating earnings per share by 18% year over year to $4.83, with a run rate ROE improvement of over 100 basis points to 13.2%.

Negative Points

• Base spread income declined by 5% due to net outflows in the Group Retirement business and changes in short-term interest rates.
• The Individual Retirement segment experienced a 7% decline in adjusted pretax operating income due to base spread compression.
• The company anticipates near-term headwinds from changes in short-term interest rates and related hedging activities.
• Corebridge Financial Inc (NYSE:CRBG) expects EPS growth to be less than 10% in 2025 due to spread pressures and other dynamics.
• The company faces potential challenges with increased surrender rates in Individual Retirement as large lots of fixed and fixed index annuities exit their surrender charge period.

Q & A Highlights

Q: How should we think about base spread income in the first half of 2025 versus the second half, considering the Fed's rate cuts? A: Kevin Hogan, President and CEO, explained that while short-term headwinds from rate cuts will affect spread income, the business conditions remain strong. The impact of rate cuts generally earns in over two quarters, and once the floater reset cycle is complete, spread income is expected to grow due to supportive new business conditions and positive net flows in the general account.

Q: What is the baseline EPS we should use for the 10% to 15% growth target? A: Elias Habayeb, CFO, advised using the reported EPS as the baseline. While 2025 might see growth on the lighter end of the 10% to 15% range due to the Fed's actions, the company is confident in its ability to grow EPS through organic growth, balance sheet optimization, expense management, and capital management.

Q: Can you discuss the expected growth in cash flow from subsidiary dividends in 2025? A: Elias Habayeb highlighted that diversified revenue sources and expense management contribute to stable cash flow generation. The Bermuda strategy provides financial flexibility, supporting capital management objectives and business growth, leading to increased dividends from insurance companies.

Q: What are your expectations for surrender rates in Individual Retirement for 2025? A: Kevin Hogan noted that surrender rates are influenced by market interest rates and credit spreads. While the volume of products exiting surrender charge protection will increase, the surrender rates will reflect market conditions. The current environment supports attractive margins, and the company expects continued growth in general accounts and spread income.

Q: Can you provide more details on the potential for further expense efficiencies? A: Kevin Hogan mentioned that Corebridge Forward's remaining $50 million in savings will earn in throughout the year. The focus is on digitization and automation in data, actuarial, and finance processes to reduce unit costs over time, although no specific targets were announced.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.