• Gross Sales: $15.3 billion for the full year 2024, a 16% increase over 2023; $3.5 billion in the fourth quarter.
• Retail Channel Sales: $12 billion for the full year, a 20% increase over 2023; $2.5 billion in the fourth quarter.
• Institutional Market Sales: $3.3 billion for the full year, including $2.3 billion in pension risk transfer and $1 billion in funding agreements.
• Net Sales Retained: $10.6 billion for the full year 2024, a 15% increase over 2023; $2.5 billion in the fourth quarter.
• Assets Under Management (AUM): $65.3 billion at the end of the quarter, a 17% increase over the fourth quarter of 2023.
• Adjusted Net Earnings: $153 million in the fourth quarter, up 17% over the fourth quarter of 2023; $657 million for the full year, up 22% over 2023.
• Adjusted ROA: 127 basis points for the year, up 10 basis points over 2023.
• Return on Equity (ROE): Adjusted ROE excluding AOCI and significant items increased from 10% to over 12% over the last year.
• Book Value per Share: $44.28 at December 31, 2024, an increase of 10% compared to December 31, 2023.
• Debt Outstanding: $2.2 billion at December 31, 2024.
• Risk-Based Capital (RBC) Ratio: Over 410% for the primary operating subsidiary.

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

Release Date: February 21, 2025

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

Positive Points

• F&G Annuities & Life Inc (NYSE:FG) reported record gross sales of $15.3 billion for the full year 2024, a 16% increase over 2023.
• The company achieved record retail channel sales of $12 billion for the full year, driven by strong demand for individual annuity and life solutions.
• F&G successfully launched a new RILA registered product, gaining entry into a fast-growing market with seven partners onboarded.
• The company reported robust institutional market sales of $3.3 billion, with significant growth in pension risk transfer sales.
• F&G's assets under management reached a record $65.3 billion, a 17% increase over the previous year, driven by net new business flows.

Negative Points

• Funding agreement sales decreased to $1 billion for the full year, compared to $1.2 billion in 2023, with no sales in the fourth quarter.
• The company experienced a sequential decrease in fixed income yield due to higher cash balances and runoff of higher-yielding assets.
• There is a noted delay in getting the new RILA product onto platforms, as it is F&G's first registered product.
• The company faces potential impacts from industry lawsuits related to pension risk transfer, although no meaningful impact has been seen yet.
• F&G's adjusted return on equity, while improved, is still working towards the targeted range of 13% to 14%.

Q & A Highlights

Q: Can you talk about the evolving organizational structure of the company and what that growth opportunity means, particularly regarding Bermuda? A: Christopher Blunt, CEO: As our business has grown significantly, we've expanded into multiple new distribution channels and are driving value through reinsurance arrangements. This growth necessitated a division of responsibilities to maximize opportunities. The offshore environment, including regulatory changes and partnerships, also presents significant opportunities, prompting organizational adjustments.

Q: Can you discuss your position in the pension risk transfer market amid industry litigation concerns? A: Christopher Blunt, CEO: We operate in the $100 million to $1 billion space, which aligns well with our balance sheet. Our straightforward structure as a US-regulated company and partnerships, such as with Blackstone, have kept us optimistic. We haven't felt an impact from litigation and continue to see opportunities in the market.

Q: What is your perspective on growth and capital management over the next few years? A: Christopher Blunt, CEO: We remain optimistic about growth due to secular demand, such as baby boomers seeking fixed annuities. We're adding distribution partners and expanding within existing channels. Capital management involves forming reinsurance partnerships and exploring funding options to support growth.

Q: How do you expect the Return on Assets (ROA) to trend, considering recent compression? A: Wendy JB Young, Chief Liability Officer: The recent decrease was driven by prepayments, but we plan to reinvest cash and adjust our asset allocation to rebound in 2025. We don't anticipate dramatic changes and expect ROA to stabilize as we deploy assets strategically.

Q: Can you elaborate on the impact of elevated surrenders on crediting rates and spreads? A: Wendy JB Young, Chief Liability Officer: Surrenders are expected to continue due to the current interest rate environment. While we don't disclose specific surrender charge amounts, we anticipate this trend to persist until significant rate changes occur. The impact on spreads is managed through strategic asset allocation and renewal rate adjustments.

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