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Brighthouse Financial(BHF) - 2024 Q4 - Earnings Call Transcript
BHFBrighthouse Financial(BHF)2025-02-12 16:27
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Financial Data and Key Metrics Changes - In 2024, Brighthouse Financial reported total annuity sales of 10billion,withrecordsalesoftheShieldproductsuitereaching10 billion, with record sales of the Shield product suite reaching 7.7 billion, a 12% increase compared to 2023 [13][12] - Life insurance sales grew to 120millionforthefullyear,representingan18120 million for the full year, representing an 18% increase over 2023 [14] - Adjusted earnings for Q4 2024 were 304 million, reflecting a notable item impact of 48million,whileadjustedearningsexcludingthisitemwere48 million, while adjusted earnings excluding this item were 352 million, up from 243millioninQ32024and243 million in Q3 2024 and 189 million in Q4 2023 [36][37] Business Line Data and Key Metrics Changes - The annuity segment reported adjusted earnings of 327million,drivenbyhighernetinvestmentincome,whilethelifesegmentreportedadjustedearningsof327 million, driven by higher net investment income, while the life segment reported adjusted earnings of 52 million, also benefiting from higher net investment income [38][39] - The runoff segment experienced an adjusted loss of 27million,reflectinghighernetinvestmentincomeandahigherunderwritingmargin[40]MarketDataandKeyMetricsChanges−Theestimatedcombinedrisk−basedcapital(RBC)ratiowasapproximately40027 million, reflecting higher net investment income and a higher underwriting margin [40] Market Data and Key Metrics Changes - The estimated combined risk-based capital (RBC) ratio was approximately 400% at year-end, at the low end of the target range of 400% to 450% in normal market conditions [22][28] - Liquid assets at the holding company were reported at 1.1 billion as of December 31, 2024, with a pro forma amount of approximately 1billionafteracapitalcontributiontoBrighthouseLifeInsuranceCompany[23][35]CompanyStrategyandDevelopmentDirection−Thecompanyisfocusedonimprovingcapitalefficiencyandunlockingcapitalthroughstrategicinitiatives,includingreinsuranceopportunitiesandsimplifyinghedgingstrategies[11][19]−BrighthouseFinancialaimstomaintainastrongstatutorybalancesheetandsupportitsdistributionfranchise,withacommitmenttoexecutingitsbusinessstrategyin2025[25][26]Management′sCommentsonOperatingEnvironmentandFutureOutlook−Managementacknowledgedchallengesinstatutoryresultsbutexpressedconfidenceintheprogressmadeonstrategicinitiativesandmaintainingrobustliquidity[10][26]−ThecompanyanticipatesstableRBCratiosaround4001 billion after a capital contribution to Brighthouse Life Insurance Company [23][35] Company Strategy and Development Direction - The company is focused on improving capital efficiency and unlocking capital through strategic initiatives, including reinsurance opportunities and simplifying hedging strategies [11][19] - Brighthouse Financial aims to maintain a strong statutory balance sheet and support its distribution franchise, with a commitment to executing its business strategy in 2025 [25][26] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges in statutory results but expressed confidence in the progress made on strategic initiatives and maintaining robust liquidity [10][26] - The company anticipates stable RBC ratios around 400% in normal market conditions, with plans to return capital to shareholders through share repurchases [66][89] Other Important Information - Corporate expenses were down over 7% compared to the previous year, reflecting a commitment to expense discipline [16][26] - The company has repurchased 250 million of common stock in 2024, reducing the number of shares outstanding by over 50% since the repurchase program began in 2018 [24] Q&A Session Summary Question: Can you touch on the drivers of RBC in the quarter? - Management discussed the impact of strategic initiatives, including reinsurance and standalone hedging for new business, which contributed positively to RBC despite market challenges [44][46] Question: What is the company's outlook on stable RBC? - Management indicated that stable RBC is expected to be around 400%, with plans for potential dividends from operating companies in the future [66][89] Question: How does the company view its public status given its complexity? - Management acknowledged the complexity but emphasized the commitment to creating long-term shareholder value and managing the business effectively [68][72] Question: What are the competitive dynamics in the RILA business? - Management noted strong demand for RILA products and expressed confidence in the company's competitive positioning, highlighting successful sales of the Shield product suite [121][122] Question: What is the size of the recent reinsurance deals? - Management provided details on the size of the reinsurance transactions, indicating that the annuity deal involved approximately $8 billion in assets [133]