Financial Data and Key Metrics Changes - The company reported earnings per share of $0.97, with an adjusted return on average equity of 10.8% and adjusted pre-tax operating income of $724 million [58][106] - Base spread income grew by 38% year-over-year, driven by higher new money rates and growth in spread-based products [66] - Total premiums and deposits reached $10.3 billion, up 45% compared to the prior year [66] Business Line Data and Key Metrics Changes - Individual Retirement reported adjusted pre-tax operating income of $534 million, a 14% increase year-over-year, with base spread income rising by 49% [78] - Group Retirement's adjusted pre-tax operating income decreased by 23% year-over-year, but increased by 7% when excluding variable investment income [79] - Life Insurance reported adjusted pre-tax operating income of $82 million, a decrease of 2% year-over-year [113] Market Data and Key Metrics Changes - The company executed approximately $3 billion in new investments in the first quarter, with an average gross yield of 6.5% [60] - The commercial mortgage loan portfolio was valued at $7.7 billion, representing 4% of total invested assets [2] - The traditional U.S. office portfolio component was $4.5 billion, approximately 2% of total invested assets [148] Company Strategy and Development Direction - The company is focused on operational separation from AIG, with significant progress made in establishing capabilities as a standalone entity [68] - A strategic review is underway to evaluate alternatives for the health insurance business in Ireland, aiming to streamline the portfolio [61] - The company continues to emphasize risk management and has derisked its portfolio over the years, particularly reducing exposure to office properties [62][88] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to weather market dislocations and capture new opportunities [70] - The outlook for Pension Risk Transfer (PRT) sales remains strong, with a robust pipeline in both the U.S. and UK [129] - Management noted that surrender rates are within expectations, reflecting market conditions and crediting rates [127] Other Important Information - The company has returned approximately $450 million in dividends to shareholders since its IPO, with a fourth consecutive quarterly dividend of $0.23 per share announced [65][117] - The company has a high-quality investment portfolio, with 94% of fixed income investments rated investment grade [1][100] Q&A Session Summary Question: What is the pace of the buyback plan? - Management indicated that the buyback program reflects confidence in the financial position and is not time-limited, with plans to complement the dividend program [8][95] Question: How are surrender rates trending? - Surrender rates increased but were within expectations based on crediting rates, with management noting that new business sales also reflect these conditions [127][154] Question: What is the outlook for the PRT market? - Management sees a strong pipeline for PRT transactions, particularly in the U.S. and UK, with larger full plan terminations expected [129] Question: How does the company approach risk management? - The company employs a disciplined risk management framework, focusing on both sides of the balance sheet and conducting regular stress tests [99][150]

UNITED STATES Washington, D.C. 20549 ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Corebridge Financial, Inc. (Exact name of registrant as specified in its charter) Delaware 95-4715639 (State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.) Registrant ...

TABLE OF CONTENTS The following charts depict our portfolio by credit rating excluding assets held through our modified coinsurance arrangements OUR INVESTMENT MANAGEMENT AGREEMENTS WITH BLACKROCK COMPETITIVE COMPENSATION AND BENEFITS We care about the health and safety of our employees. In response to the COVID-19 pandemic, we quickly and effectively transitioned a majority of our employees to remote work. We intend to maintain a hybrid work model for the foreseeable future. ITEM 1 | Business This Annual R ...

corebridge · financial CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION NON-GAAP FINANCIAL MEASURES ●●： ● | --- | --- | --- | |-----------------------------|--------------------------------|-----------------------------------------| | | | | | Balance sheet | Profitability | Capital return | | 400%+ | | $600 million | | Life Fleet RBC Ratio 1 | 12% - 14% Adjusted ROAE 1,3,4 | Aggregate annual stockholder dividends | | 25% - 30% | | 60% - 65% | | Target financial leverage 2 | | Payout ratio 4,5 | Re ...

Financial Data and Key Metrics Changes - Corebridge Financial reported operating earnings per share of $0.88 for Q4 2022 and $2.87 for the full year, demonstrating resilience despite external conditions [10] - Adjusted pretax operating income (APTOI) for Q4 was $639 million, which was 31% lower than the prior year quarter, primarily due to market conditions and structural changes [22][53] - Base spread income, the largest source of earnings, grew 25% year-over-year, reflecting higher new money rates and strong growth in spread-based products [23] Business Line Data and Key Metrics Changes - Individual Retirement reported APTOI of $436 million, benefiting from strong growth in base spread income, which was up 35% year-over-year [27] - Life Insurance generated APTOI of $97 million in Q4, with core underwriting margin improving 78% year-over-year due to favorable mortality experience [30] - Group Retirement reported APTOI of $177 million, with base spread income growing 13% year-over-year [60] Market Data and Key Metrics Changes - The company generated premiums and deposits of $3.8 billion in Q4 2022, contributing to $15.1 billion of new deposits for the year, with positive net flows of $2.4 billion, reflecting nearly 200% growth year-over-year [5] - Fixed index annuity premiums and deposits reached $1.7 billion in Q4 and over $6.3 billion for the full year, with net inflows of $4.5 billion [12] - Group Retirement premiums and deposits were nearly $2.2 billion for Q4 and approximately $8 billion for the full year [43] Company Strategy and Development Direction - The company is focused on creating sustainable, profitable growth while delivering on financial goals, including achieving a return on equity (ROE) of 12% to 14% [49][67] - Corebridge is advancing its investment partnerships and efficiency strategies, with significant progress on its modernization program aimed at delivering $400 million in annual run rate savings [14][48] - The company is well-positioned to capitalize on market opportunities and strengthen relationships with distribution partners [44] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate uncertain and volatile market conditions, highlighting the strength of its diverse sources of earnings and broad product platform [19][20] - The outlook for 2023 includes expectations for EPS growth driven by expense savings, investments, organic growth, and capital management [35] - Management anticipates continued volatility in GAAP earnings but expects an increase in adjusted book value [34] Other Important Information - The company ended the year with $1.5 billion in holding company liquidity and paid approximately $300 million in dividends since the IPO [33] - Adjusted book value was $21.4 billion, up 9% year-over-year, but down 2% from the previous quarter due to derivative and foreign exchange mark-to-market losses [89] - The company expects to see reduced volatility in operating results with the implementation of LDTI in 2023 [65] Q&A Session Summary Question: Update on potential secondary offering and buyback program - Management indicated they have the financial flexibility to participate in a buyback program if a secondary offering occurs [69][70] Question: Clarification on expense savings and standalone company expenses - Management confirmed that $130 million of incremental expense savings is expected to earn in 2023, offset by $75 million to $100 million in higher standalone company expenses [71][72] Question: Insights on fixed annuity surrender activity - Management noted that while surrenders are higher, they are lower than expectations, and strong new business has resulted in positive flows [96][97] Question: Discussion on interest maintenance reserve and investment strategy - Management clarified that the interest maintenance reserve does not dictate investment decisions, which are driven by liabilities and market opportunities [100][125] Question: Commentary on mortality trends and reinsurance rates - Management stated that mortality performance in the U.S. has been favorable, and reinsurance rates have not materially impacted their business [129][131]

[Cautionary Statement Regarding Forward-Looking Information](index=4&type=section&id=Cautionary%20Statement%20Regarding%20Forward-Looking%20Information) [Overview of Forward-Looking Statements](index=4&type=section&id=Overview%20of%20Forward-Looking%20Statements) The report contains forward-looking statements subject to risks and uncertainties, identifiable by specific terminology[11](index=11&type=chunk) - Forward-looking statements are identified by terms such as 'believes,' 'expects,' 'may,' 'will,' 'intends,' 'estimates,' and 'anticipates,' covering financial position, results of operations, growth strategies, and regulatory impacts[11](index=11&type=chunk) - These statements are **not guarantees of future performance**, and actual outcomes may differ materially due to various risks and uncertainties[11](index=11&type=chunk) [Key Risk Factors](index=4&type=section&id=Key%20Risk%20Factors) Actual results may differ from forward-looking statements due to interest rates, economic conditions, and operational challenges - Factors that could cause actual results to differ materially include **rapidly increasing interest rates**, deteriorating economic conditions, market volatility, and geopolitical tensions (e.g., Ukraine conflict)[11](index=11&type=chunk) - Operational risks include the unpredictability of insurance claims, inadequate reinsurance, acceleration of DAC amortization, and inaccuracies in investment valuations[11](index=11&type=chunk) - External and internal factors such as intense competition, technological changes, catastrophes (including climate change), and the company's separation from AIG also pose significant risks[13](index=13&type=chunk)[15](index=15&type=chunk) [Part I – Financial Information](index=7&type=section&id=Part%20I%20%E2%80%93%20Financial%20Information) [ITEM 1. Financial Statements](index=7&type=section&id=ITEM%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements for Corebridge Financial, Inc [Condensed Consolidated Balance Sheets (Unaudited)](index=7&type=section&id=Condensed%20Consolidated%20Balance%20Sheets%20(Unaudited)) Total assets and equity decreased significantly as of September 30, 2022, compared to year-end 2021 Condensed Consolidated Balance Sheets | Metric | Sep 30, 2022 (in millions) | Dec 31, 2021 (in millions) | |:---|:---|:---| | Total Assets | $354,595 | $416,212 | | Total Liabilities | $346,204 | $387,284 | | Total Equity | $8,374 | $28,845 | - Fixed maturity securities available for sale decreased from **$198,568 million to $151,039 million**, reflecting a significant decline in fair value[18](index=18&type=chunk) - Separate account assets decreased from **$109,111 million to $81,302 million**, mirroring the decline in separate account liabilities[18](index=18&type=chunk) [Condensed Consolidated Statements of Income (Loss) (Unaudited)](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income%20(Loss)%20(Unaudited)) Net income increased substantially for the three and nine months ended September 30, 2022, driven by higher net realized gains Condensed Consolidated Statements of Income (Loss) | Metric | 3 Months Ended Sep 30, 2022 (in millions) | 3 Months Ended Sep 30, 2021 (in millions) | 9 Months Ended Sep 30, 2022 (in millions) | 9 Months Ended Sep 30, 2021 (in millions) | |:---|:---|:---|:---|:---| | Total Revenues | $7,141 | $5,521 | $22,810 | $16,551 | | Total Benefits and Expenses | $4,039 | $3,568 | $11,571 | $11,047 | | Net Income Attributable to Corebridge | $2,351 | $1,420 | $8,715 | $4,233 | - Total net realized gains **significantly increased to $2,700 million** for the three months ended September 30, 2022, from $571 million in the prior year, and to $9,704 million for the nine months, from $1,660 million[20](index=20&type=chunk) - Basic EPS for common stock was **$3.64 for the three months** and **$13.51 for the nine months** ended September 30, 2022[20](index=20&type=chunk) [Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited)](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%20(Loss)%20(Unaudited)) The company shifted from comprehensive income to a comprehensive loss, driven by substantial unrealized depreciation of investments Condensed Consolidated Statements of Comprehensive Income (Loss) | Metric | 3 Months Ended Sep 30, 2022 (in millions) | 3 Months Ended Sep 30, 2021 (in millions) | 9 Months Ended Sep 30, 2022 (in millions) | 9 Months Ended Sep 30, 2021 (in millions) | |:---|:---|:---|:---|:---| | Net Income | $2,477 | $1,572 | $8,996 | $4,545 | | Other Comprehensive Income (Loss) | $(6,510) | $(1,303) | $(27,476) | $(4,061) | | Comprehensive Income (Loss) Attributable to Corebridge | $(4,140) | $121 | $(18,742) | $176 | - The change in unrealized depreciation of all other investments was a major driver, showing a **loss of $6,379 million** for the three months and **$27,442 million** for the nine months ended September 30, 2022[22](index=22&type=chunk) [Condensed Consolidated Statements of Equity (Unaudited)](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Equity%20(Unaudited)) Total shareholders' equity declined substantially due to a significant accumulated other comprehensive loss Condensed Consolidated Statements of Equity | Metric | Balance, Beginning of Period (9 Months Ended Sep 30, 2022) (in millions) | Balance, End of Period (9 Months Ended Sep 30, 2022) (in millions) | |:---|:---|:---| | Total Corebridge Shareholders' Equity | $27,086 | $7,529 | | Accumulated Other Comprehensive Income (Loss) | $10,167 | $(17,290) | | Retained Earnings | $8,859 | $16,783 | - Accumulated other comprehensive income (loss) shifted from a **gain of $10,167 million** at the beginning of the year to a **loss of $17,290 million** by September 30, 2022, largely due to unrealized depreciation of investments[25](index=25&type=chunk) - Net income attributable to Corebridge contributed **$8,715 million** to equity during the nine months ended September 30, 2022, partially offset by **$728 million** in dividends on common stock[25](index=25&type=chunk) [Condensed Consolidated Statements of Cash Flows (Unaudited)](index=12&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20(Unaudited)) Net cash from operating activities increased, while investing activities used more cash, resulting in a net decrease in cash Condensed Consolidated Statements of Cash Flows | Metric | 9 Months Ended Sep 30, 2022 (in millions) | 9 Months Ended Sep 30, 2021 (in millions) | |:---|:---|:---| | Net Cash Provided by Operating Activities | $2,202 | $2,032 | | Net Cash Used in Investing Activities | $(3,330) | $(3,044) | | Net Cash Provided by Financing Activities | $980 | $1,097 | | Net Increase (Decrease) in Cash and Restricted Cash | $(157) | $84 | - Significant investing activities included **$14,385 million** in purchases of available-for-sale securities and **$9,399 million** in mortgage and other loans receivable for the nine months ended September 30, 2022[29](index=29&type=chunk) - Financing activities for 2022 included **$7,451 million** from the issuance of long-term debt and **$8,312 million** in repayments of short-term debt[29](index=29&type=chunk) [NOTE 1. Overview and Basis of Presentation](index=15&type=section&id=NOTE%201.%20Overview%20and%20Basis%20of%20Presentation) Corebridge is a leading U.S. retirement and life insurance provider that completed its IPO on September 19, 2022 - Corebridge Financial, Inc completed its IPO on September 19, 2022, with **AIG retaining 77.7% ownership** of outstanding common stock[38](index=38&type=chunk) - The company underwent a reorganization on December 31, 2021, to consolidate AIG's life and retirement business and most investment management operations[38](index=38&type=chunk) - Key transactions include a strategic partnership with Blackstone, where Blackstone manages **$50 billion of assets**, and the sale of an affordable housing portfolio for **$4.9 billion**, resulting in a **$3.0 billion pre-tax gain**[44](index=44&type=chunk)[46](index=46&type=chunk) [NOTE 2. Summary of Significant Accounting Policies](index=17&type=section&id=NOTE%202.%20Summary%20of%20Significant%20Accounting%20Policies) The company adopted reference rate reform guidance and anticipates significant impacts from new long-duration contract standards - The company adopted reference rate reform guidance in 2022, allowing certain contract modifications to be accounted for as a continuation of existing contracts, with **no material impact** on financial statements[51](index=51&type=chunk) - Targeted improvements to accounting for long-duration contracts will be adopted on January 1, 2023, using modified retrospective transition for liabilities and DAC, and retrospective for market risk benefits (MRBs)[52](index=52&type=chunk) - The adoption of long-duration contract improvements is estimated to **decrease pre-tax equity by $1.0 billion to $3.0 billion**[52](index=52&type=chunk) [NOTE 3. Segment Information](index=19&type=section&id=NOTE%203.%20Segment%20Information) Corebridge reports results across five segments, evaluating performance based on adjusted revenues and adjusted pre-tax operating income - Corebridge operates through five reportable segments: Individual Retirement, Group Retirement, Life Insurance, Institutional Markets, and Corporate & Other[60](index=60&type=chunk) - Segment performance is assessed using adjusted revenues and adjusted pre-tax operating income (APTOI), which exclude items like Fortitude-related adjustments, most net realized gains/losses, and fair value changes of embedded derivatives[60](index=60&type=chunk)[61](index=61&type=chunk)[62](index=62&type=chunk)[66](index=66&type=chunk) Segment APTOI | Segment | 3 Months Ended Sep 30, 2022 (APTOI in millions) | 3 Months Ended Sep 30, 2021 (APTOI in millions) | 9 Months Ended Sep 30, 2022 (APTOI in millions) | 9 Months Ended Sep 30, 2021 (APTOI in millions) | |:---|:---|:---|:---|:---| | Individual Retirement | $199 | $257 | $787 | $1,391 | | Group Retirement | $180 | $317 | $569 | $958 | | Life Insurance | $103 | $121 | $151 | $90 | | Institutional Markets | $83 | $142 | $285 | $418 | | Corporate & Other | $(146) | $33 | $(262) | $(97) | | Total Corebridge APTOI | $423 | $872 | $1,544 | $2,759 | [NOTE 4. Fair Value Measurements](index=22&type=section&id=NOTE%204.%20Fair%20Value%20Measurements) This note details the fair value measurements of assets and liabilities, categorized into a three-level hierarchy - Fair value measurements are classified into **Level 1** (quoted prices in active markets), **Level 2** (observable inputs other than Level 1), and **Level 3** (significant unobservable inputs)[73](index=73&type=chunk) Fair Value of Assets and Liabilities (Sep 30, 2022) | Category | Level 1 (in millions) | Level 2 (in millions) | Level 3 (in millions) | Total (in millions) | |:---|:---|:---|:---|:---| | **Assets (Sep 30, 2022):** | | | | | | Bonds available for sale | $0 | $130,740 | $20,299 | $151,039 | | Equity securities | $74 | $56 | $14 | $144 | | Separate account assets | $77,683 | $3,619 | $0 | $81,302 | | **Liabilities (Sep 30, 2022):** | | | | | | Policyholder contract deposits | $0 | $140 | $6,361 | $6,501 | | Derivative liabilities | $4 | $3,539 | $3 | $83 | - Changes in Level 3 assets for the nine months ended September 30, 2022, included significant **net realized and unrealized losses of $391 million** and a **decrease of $3,163 million** in other comprehensive income[92](index=92&type=chunk) - Significant unobservable inputs for Level 3 liabilities, such as variable annuity GMWBs and fixed index annuities, include equity volatility, lapse rates, mortality multipliers, and non-performance risk adjustments (NPA)[112](index=112&type=chunk) [NOTE 5. Investments](index=41&type=section&id=NOTE%205.%20Investments) This note provides a detailed breakdown of the company's investment portfolio, net investment income, and realized gains and losses Investment Portfolio Summary | Category | Amortized Cost (Sep 30, 2022) (in millions) | Fair Value (Sep 30, 2022) (in millions) | Amortized Cost (Dec 31, 2021) (in millions) | Fair Value (Dec 31, 2021) (in millions) | |:---|:---|:---|:---|:---| | Bonds available for sale | $177,399 | $151,039 | $182,593 | $198,568 | | Other bond securities (at fair value) | N/A | $4,775 | N/A | $2,082 | | Equity securities (at fair value) | N/A | $144 | N/A | $242 | | Total investments | $213,806 | $213,806 | $256,318 | $256,318 | - As of September 30, 2022, 16,256 individual fixed maturity securities were in an unrealized loss position, with **$27,518 million in gross unrealized losses**, for which no allowance for credit loss was recorded[140](index=140&type=chunk) Investment Income and Gains (Losses) | Metric | 3 Months Ended Sep 30, 2022 (in millions) | 3 Months Ended Sep 30, 2021 (in millions) | 9 Months Ended Sep 30, 2022 (in millions) | 9 Months Ended Sep 30, 2021 (in millions) | |:---|:---|:---|:---|:---| | Net Investment Income | $2,160 | $3,005 | $7,021 | $8,747 | | Net Realized Gains (Losses) | $2,700 | $571 | $9,704 | $1,660 | | Change in Unrealized Appreciation (Depreciation) of Investments | $(10,048) | $(1,779) | $(42,324) | $(6,641) | [NOTE 6. Lending Activities](index=46&type=section&id=NOTE%206.%20Lending%20Activities) This note details the company's lending activities, primarily focusing on mortgage and other loans receivable Loan Portfolio Summary | Loan Type | Sep 30, 2022 (in millions) | Dec 31, 2021 (in millions) | |:---|:---|:---| | Commercial mortgages | $31,591 | $30,528 | | Residential mortgages | $4,901 | $4,672 | | Life insurance policy loans | $1,767 | $1,832 | | Commercial loans, other loans and notes receivable | $4,828 | $2,852 | | Total mortgage and other loans receivable, net | $42,539 | $39,388 | | Allowance for credit losses | $(548) | $(496) | - Commercial mortgages are primarily for apartments, offices, and retail properties, with significant concentrations in **New York (20%)** and **California (11%)** as of September 30, 2022[176](index=176&type=chunk) Allowance for Credit Losses Rollforward | Metric | 3 Months Ended Sep 30, 2022 (in millions) | 3 Months Ended Sep 30, 2021 (in millions) | 9 Months Ended Sep 30, 2022 (in millions) | 9 Months Ended Sep 30, 2021 (in millions) | |:---|:---|:---|:---|:---| | Allowance for credit losses, beginning of period | $484 | $560 | $496 | $657 | | Provision for loan losses | $64 | $(23) | $56 | $(120) | | Allowance for credit losses, end of period | $548 | $505 | $548 | $505 | - During the nine months ended September 30, 2022, loans with a carrying value of **$143 million** were modified in troubled debt restructurings (TDRs)[184](index=184&type=chunk) [NOTE 7. Reinsurance](index=49&type=section&id=NOTE%207.%20Reinsurance) This note details the company's reinsurance activities, particularly the modified coinsurance agreements with Fortitude Re - Corebridge has modco reinsurance agreements with Fortitude Re, where investments supporting the agreements are withheld by Corebridge, creating a funds withheld payable that contains an embedded derivative[185](index=185&type=chunk) Fortitude Re Financial Impact | Metric | 3 Months Ended Sep 30, 2022 (in millions) | 3 Months Ended Sep 30, 2021 (in millions) | 9 Months Ended Sep 30, 2022 (in millions) | 9 Months Ended Sep 30, 2021 (in millions) | |:---|:---|:---|:---|:---| | Net investment income - Fortitude Re funds withheld assets | $157 | $445 | $617 | $1,336 | | Net realized gains (losses) on Fortitude Re funds withheld embedded derivatives | $1,463 | $(195) | $6,694 | $(29) | | Comprehensive income (loss) | $119 | $17 | $319 | $40 | - The total reinsurance recoverables as of September 30, 2022, were **$30.8 billion**, with approximately **100% being investment grade**[191](index=191&type=chunk) Reinsurance Recoverable Allowance | Metric | 3 Months Ended Sep 30, 2022 (in millions) | 3 Months Ended Sep 30, 2021 (in millions) | 9 Months Ended Sep 30, 2022 (in millions) | 9 Months Ended Sep 30, 2021 (in millions) | |:---|:---|:---|:---|:---| | Reinsurance recoverable allowance, beginning of period | $107 | $87 | $101 | $83 | | Current period provision for expected credit losses and disputes | $1 | $15 | $7 | $19 | | Reinsurance recoverable allowance, end of period | $108 | $102 | $108 | $102 | [NOTE 8. Variable Interest Entities](index=51&type=section&id=NOTE%208.%20Variable%20Interest%20Entities) This note explains the company's involvement with Variable Interest Entities, including consolidation criteria and financial exposure - Corebridge consolidates VIEs where it is the primary beneficiary, having both the power to direct significant activities and the obligation to absorb losses or right to receive benefits[194](index=194&type=chunk) VIE Assets, Liabilities, and Exposure | Category | Sep 30, 2022 (in millions) | Dec 31, 2021 (in millions) | |:---|:---|:---| | Total Assets of Consolidated VIEs | $12,061 | $14,720 | | Total Liabilities of Consolidated VIEs | $6,117 | $7,771 | | Total Assets of Unconsolidated VIEs | $366,108 | $309,866 | | Maximum Exposure to Loss from Unconsolidated VIEs | $8,455 | $6,911 | Consolidated VIE Financial Results | Metric | 3 Months Ended Sep 30, 2022 (in millions) | 3 Months Ended Sep 30, 2021 (in millions) | 9 Months Ended Sep 30, 2022 (in millions) | 9 Months Ended Sep 30, 2021 (in millions) | |:---|:---|:---|:---|:---| | Total Revenue from Consolidated VIEs | $192 | $555 | $693 | $1,315 | | Net Income Attributable to Corebridge from Consolidated VIEs | $4 | $331 | $254 | $615 | [NOTE 9. Derivatives and Hedge Accounting](index=58&type=section&id=NOTE%209.%20Derivatives%20and%20Hedge%20Accounting) This note describes the company's use of derivatives for financial risk management and investment operations - Corebridge uses derivatives (interest rate, foreign exchange, equity, credit) for financial risk management and investment operations, including hedging insurance liabilities and investments[200](index=200&type=chunk) Derivative Notional Amounts and Fair Values (Sep 30, 2022) | Derivative Type | Gross Assets Notional Amount (Sep 30, 2022) (in millions) | Derivative Assets Fair Value (Sep 30, 2022) (in millions) | Gross Liabilities Notional Amount (Sep 30, 2022) (in millions) | Derivative Liabilities Fair Value (Sep 30, 2022) (in millions) | |:---|:---|:---|:---|:---| | Interest rate contracts | $19,319 | $1,702 | $25,514 | $3,198 | | Foreign exchange contracts | $14,219 | $2,262 | $1,424 | $264 | | Equity contracts | $24,435 | $554 | $8,584 | $84 | | Total derivatives, gross | $103,806 | $4,534 | $35,590 | $3,546 | | Total derivatives on condensed consolidated balance sheets (net of netting/collateral) | N/A | $344 | N/A | $83 | - For fair value hedges, gains/losses on hedging derivatives and hedged items are recognized in earnings, with a net impact of **$1 million for interest rate contracts** and **$105 million for foreign exchange contracts** for the three months ended September 30, 2022[208](index=208&type=chunk) Gains (Losses) on Derivatives Not Designated as Hedges | Classification | 3 Months Ended Sep 30, 2022 (Gains/(Losses) in millions) | 3 Months Ended Sep 30, 2021 (Gains/(Losses) in millions) | 9 Months Ended Sep 30, 2022 (Gains/(Losses) in millions) | 9 Months Ended Sep 30, 2021 (Gains/(Losses) in millions) | |:---|:---|:---|:---|:---| | Net realized gains - excluding Fortitude Re funds withheld assets | $1,581 | $357 | $4,206 | $554 | | Net realized gains (losses) on Fortitude Re funds withheld embedded derivatives | $1,463 | $(195) | $6,694 | $(29) | | Total (derivatives not designated as hedging instruments) | $3,030 | $162 | $10,891 | $500 | [NOTE 10. Insurance Liabilities](index=62&type=section&id=NOTE%2010.%20Insurance%20Liabilities) This note details the company's insurance liabilities, focusing on universal life policies and variable annuity guaranteed benefits Universal Life Policies with Secondary Guarantees | Metric | 3 Months Ended Sep 30, 2022 (in millions) | 3 Months Ended Sep 30, 2021 (in millions) | 9 Months Ended Sep 30, 2022 (in millions) | 9 Months Ended Sep 30, 2021 (in millions) | |:---|:---|:---|:---|:---| | Universal life policies with secondary guarantees, beginning balance | $3,151 | $4,681 | $4,505 | $4,751 | | Incurred guaranteed benefits | $176 | $75 | $564 | $419 | | Balance, end of period | $2,701 | $4,478 | $2,701 | $4,478 | - The net amount at risk for universal life policies with secondary guarantees was **$68,350 million** at September 30, 2022[215](index=215&type=chunk) Variable Annuity Guaranteed Benefits | Metric | Sep 30, 2022 (in millions) | Dec 31, 2021 (in millions) | |:---|:---|:---| | Individual Retirement GMDB Net Amount at Risk - gross | $4,042 | $726 | | Group Retirement GMDB Net Amount at Risk - gross | $562 | $161 | | Individual Retirement GMWB and GMDB reserve (not derivatives) | $286 | $1,085 | | Group Retirement GMWB reserves (not derivatives) | $93 | $194 | - Certain variable annuity GMWB benefits are accounted for as embedded derivatives measured at fair value, with net fair values of **$0.7 billion for Individual Retirement** and **$(4) million for Group Retirement** as of September 30, 2022[230](index=230&type=chunk) [NOTE 11. Debt](index=67&type=section&id=NOTE%2011.%20Debt) This note outlines the company's debt structure, including recent issuances and the repayment of an affiliated promissory note Debt Summary | Debt Type | Sep 30, 2022 (in millions) | Dec 31, 2021 (in millions) | |:---|:---|:---| | Short-term debt | $1,500 | $8,317 | | Long-term debt, net of issuance costs | $7,868 | $427 | | Debt of consolidated investment entities | $5,995 | $6,936 | | Total debt, net of issuance costs | $15,363 | $15,680 | - Corebridge Parent issued **$6.5 billion of senior unsecured notes** and **$1.0 billion of hybrid junior subordinated notes** in 2022[237](index=237&type=chunk)[238](index=238&type=chunk) - The **$8.3 billion affiliated senior promissory note to AIG was repaid in full** during the nine months ended September 30, 2022[241](index=241&type=chunk) - The company entered into a **$2.5 billion five-year revolving credit agreement** in May 2022, with no outstanding borrowings as of September 30, 2022[244](index=244&type=chunk) [NOTE 12. Contingencies, Commitments and Guarantees](index=69&type=section&id=NOTE%2012.%20Contingencies,%20Commitments%20and%20Guarantees) This note details the company's legal contingencies, investment commitments, and various guarantees - Corebridge is subject to various legal proceedings, regulatory investigations, and litigation, with potential for significant losses, though the estimated range of reasonably possible loss in excess of accrued amounts is **not material**[251](index=251&type=chunk) - The company has commitments to invest in limited partnerships, private equity funds, and hedge funds totaling **$5.0 billion** at September 30, 2022[256](index=256&type=chunk) - AIG provides certain guarantees to Corebridge, including General Guarantee Agreements for insurance policies and a Capital Maintenance Agreement for AGC[257](index=257&type=chunk)[260](index=260&type=chunk) - Corebridge is involved in the Moriarty litigation regarding the application of California's AB 1747 to life insurance policies, with a trial date set for February 7, 2023[255](index=255&type=chunk) [NOTE 13. Equity and Redeemable Noncontrolling Interest](index=71&type=section&id=NOTE%2013.%20Equity%20and%20Redeemable%20Noncontrolling%20Interest) This note details changes in shareholders' equity, including dividends and accumulated other comprehensive income - Corebridge declared a cash dividend of **$0.23 per share ($148 million)** on September 30, 2022, and paid **$580 million** in cash dividends for the nine months ended September 30, 2022[261](index=261&type=chunk) Accumulated Other Comprehensive Income (Loss) | Metric | Balance as of June 30, 2022 (in millions) | Balance, September 30, 2022 (in millions) | |:---|:---|:---| | Accumulated other comprehensive income (loss) | $(10,799) | $(17,290) | | Unrealized Appreciation (Depreciation) of All Other Investments | $(10,854) | $(17,233) | | Total other comprehensive income (loss) | $(6,510) | $(27,476) | - Non-redeemable noncontrolling interest activity primarily relates to consolidated investment entities, with distributions of **$1,117 million** and contributions of **$45 million** for the nine months ended September 30, 2022[274](index=274&type=chunk) Redeemable Noncontrolling Interest | Metric | 3 Months Ended Sep 30, 2022 (in millions) | 3 Months Ended Sep 30, 2021 (in millions) | 9 Months Ended Sep 30, 2022 (in millions) | 9 Months Ended Sep 30, 2021 (in millions) | |:---|:---|:---|:---|:---| | Redeemable noncontrolling interest, beginning balance | $58 | $51 | $83 | $51 | | Distributions to noncontrolling interests | $(40) | $0 | $(65) | $0 | | Ending balance | $17 | $69 | $17 | $69 | [NOTE 14. Earnings Per Common Share](index=76&type=section&id=NOTE%2014.%20Earnings%20Per%20Common%20Share) This note details the computation of basic and diluted earnings per common share following a stock split and recapitalization - On September 6, 2022, Corebridge Parent effectuated a **6,450 to 1 stock split**, resulting in 645,000,000 shares of a single class of Common Stock[278](index=278&type=chunk) Earnings Per Common Share | Metric | 3 Months Ended Sep 30, 2022 | 3 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2021 | |:---|:---|:---|:---|:---| | Net income attributable to Corebridge common shareholders (in millions) | $2,351 | N/A | $8,715 | N/A | | Weighted average common shares outstanding - basic (in millions) | 645.7 | N/A | 645.2 | N/A | | Basic EPS - Common stock | $3.64 | N/A | $13.51 | N/A | | Diluted EPS - Common stock | $3.63 | N/A | $13.50 | N/A | - Prior to September 6, 2022, the two-class method was used, with Class B shares (owned by Blackstone) participating in income except for distributions from the affordable housing portfolio sale[278](index=278&type=chunk) [NOTE 15. Income Taxes](index=77&type=section&id=NOTE%2015.%20Income%20Taxes) This note details the company's income tax accounting, including the impact of tax deconsolidation from AIG post-IPO - Post-IPO, Corebridge **tax deconsolidated from the AIG Consolidated Tax Group**, and the AGC Group will file separately for a five-year waiting period[281](index=281&type=chunk) Effective Tax Rate | Metric | 3 Months Ended Sep 30, 2022 | 3 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2021 | |:---|:---|:---|:---|:---| | Effective Tax Rate on Income from Operations | 20.1% | 19.5% | 20.0% | 17.4% | - The effective tax rate for Q3 2022 was **20.1%**, differing from the 21% statutory rate due to tax benefits from deconsolidation and dividends received deduction[285](index=285&type=chunk) - An additional **$127 million valuation allowance** was established related to tax attribute carryforwards, and **$1.6 billion** for unrealized tax capital losses in the U.S. Life Insurance Companies' available-for-sale securities portfolio[289](index=289&type=chunk)[292](index=292&type=chunk) [NOTE 16. Related Parties](index=79&type=section&id=NOTE%2016.%20Related%20Parties) This note details Corebridge's transactions with related parties, primarily AIG and Blackstone Related Party Transactions | Metric | 3 Months Ended Sep 30, 2022 (in millions) | 3 Months Ended Sep 30, 2021 (in millions) | 9 Months Ended Sep 30, 2022 (in millions) | 9 Months Ended Sep 30, 2021 (in millions) | |:---|:---|:---|:---|:---| | Total Revenues from Related Parties | $27 | $13 | $79 | $48 | | Total Expenses to Related Parties | $68 | $93 | $155 | $458 | - Key reorganization transactions included the transfer of investment management operations, a **3.5% ownership interest in Fortitude Re**, and the purchase of AIG Technologies, Inc. and Eastgreen, Inc. from AIG[299](index=299&type=chunk) - Corebridge entered into a long-term asset management relationship with Blackstone, with Blackstone managing an initial **$50.0 billion** of the investment portfolio, increasing to **$92.5 billion** by Q3 2027[318](index=318&type=chunk) - The **$8.3 billion promissory note** issued to AIG in November 2021 was repaid during the nine months ended September 30, 2022[310](index=310&type=chunk) [ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=85&type=section&id=ITEM%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides a comprehensive discussion and analysis of Corebridge's financial condition and results of operations [Executive Summary](index=87&type=section&id=Executive%20Summary) Corebridge is a major U.S. provider of retirement solutions and insurance products, with results impacted by key strategic partnerships - Corebridge's revenues are primarily from premiums, policy fees, net investment income, net realized gains, and advisory fee income[329](index=329&type=chunk) - Benefits and expenses are driven by policyholder benefits, interest credited, DAC amortization, general operating expenses, and interest expense[330](index=330&type=chunk) Key Financial Metrics | Metric | 3 Months Ended Sep 30, 2022 (in millions) | 3 Months Ended Sep 30, 2021 (in millions) | 9 Months Ended Sep 30, 2022 (in millions) | 9 Months Ended Sep 30, 2021 (in millions) | |:---|:---|:---|:---|:---| | Net Income Attributable to Corebridge | $2,351 | $1,420 | $8,715 | $4,233 | | Adjusted Pre-Tax Operating Income (APTOI) | $423 | $872 | $1,544 | $2,759 | - The company's strategic partnership with Blackstone involves managing **$50 billion of assets**, increasing to **$92.5 billion by Q3 2027**, and a binding letter of intent with BlackRock to transfer management of up to **$90 billion** of liquid fixed income assets[349](index=349&type=chunk)[351](index=351&type=chunk) [Use of Non-GAAP Measures](index=94&type=section&id=Use%20of%20Non-GAAP%20Measures) This section defines and reconciles various non-GAAP financial measures used by management to evaluate performance - Adjusted revenues exclude net realized gains (losses), non-operating litigation settlements, and changes in fair value of securities used to hedge guaranteed living benefits[369](index=369&type=chunk) Reconciliation of Total Revenues to Adjusted Revenues | Metric | 3 Months Ended Sep 30, 2022 (in millions) | 3 Months Ended Sep 30, 2021 (in millions) | 9 Months Ended Sep 30, 2022 (in millions) | 9 Months Ended Sep 30, 2021 (in millions) | |:---|:---|:---|:---|:---| | Total Revenues | $7,141 | $5,521 | $22,810 | $16,551 | | Total Adjustments | $(2,700) | $(855) | $(10,136) | $(2,772) | | Adjusted Revenues | $4,441 | $4,666 | $12,674 | $13,779 | - APTOI excludes Fortitude-related adjustments, most net realized gains/losses, fair value changes of embedded derivatives, and other non-recurring items to provide a clearer view of underlying business operations[373](index=373&type=chunk)[376](index=376&type=chunk)[377](index=377&type=chunk) Reconciliation of Total Equity to Adjusted Book Value | Metric | Sep 30, 2022 (in millions) | Dec 31, 2021 (in millions) | |:---|:---|:---| | Total Corebridge shareholders' equity | $7,529 | $27,086 | | Adjusted Book Value | $21,868 | $19,548 | | Adjusted book value per common share | $33.90 | $30.31 | [Key Operating Metrics](index=101&type=section&id=Key%20Operating%20Metrics) This section defines and presents key operating metrics that provide insights into the company's operational scale and performance - AUM includes assets in general and separate accounts supporting life and annuity products, while AUA includes Group Retirement mutual fund assets and other third-party assets[397](index=397&type=chunk) Assets Under Management and Administration (AUMA) by Segment | Segment | Sep 30, 2022 (AUMA in billions) | Dec 31, 2021 (AUMA in billions) | |:---|:---|:---| | Individual Retirement | $134.5 | $160.2 | | Group Retirement | $109.2 | $139.8 | | Life Insurance | $26.7 | $34.4 | | Institutional Markets | $74.8 | $76.5 | | Total AUMA | $345.2 | $410.9 | - Fee income is defined as policy fees plus advisory fees and other fee income, while Spread income is net investment income less interest credited to policyholder account balances[399](index=399&type=chunk)[400](index=400&type=chunk) Key Operating Metrics Summary | Metric | 3 Months Ended Sep 30, 2022 (in millions) | 3 Months Ended Sep 30, 2021 (in millions) | 9 Months Ended Sep 30, 2022 (in millions) | 9 Months Ended Sep 30, 2021 (in millions) | |:---|:---|:---|:---|:---| | Total Fee Income | $510 | $625 | $1,609 | $1,800 | | Total Spread Income | $750 | $1,125 | $2,391 | $3,302 | | Total Underwriting Margin | $348 | $355 | $969 | $881 | | Total Net Investment Income (APTOI basis) - Insurance operations | $1,995 | $2,457 | $6,103 | $7,166 | [Consolidated Results of Operations](index=108&type=section&id=Consolidated%20Results%20of%20Operations) Pre-tax income increased significantly, driven by higher realized gains, while adjusted pre-tax operating income declined Consolidated Results Summary | Metric | 3 Months Ended Sep 30, 2022 (in millions) | 3 Months Ended Sep 30, 2021 (in millions) | 9 Months Ended Sep 30, 2022 (in millions) | 9 Months Ended Sep 30, 2021 (in millions) | |:---|:---|:---|:---|:---| | Income before income tax expense | $3,102 | $1,953 | $11,239 | $5,504 | | Net income attributable to Corebridge | $2,351 | $1,420 | $8,715 | $4,233 | | Adjusted pre-tax operating income | $423 | $872 | $1,544 | $2,759 | - For the three months ended September 30, 2022, **pre-tax income increased by $1.1 billion YoY**, driven by **$2.1 billion higher realized gains**, partially offset by **$845 million lower net investment income**[410](index=410&type=chunk) - For the nine months ended September 30, 2022, **pre-tax income increased by $5.7 billion YoY**, primarily due to **$8.0 billion higher realized gains**[412](index=412&type=chunk) - **APTOI decreased by $449 million** for the three months and **$1.2 billion** for the nine months ended September 30, 2022, mainly due to lower net investment income and higher policyholder benefits[415](index=415&type=chunk)[416](index=416&type=chunk) [Business Segment Operations](index=111&type=section&id=Business%20Segment%20Operations) This section provides a detailed analysis of the financial performance of Corebridge's five business segments - Corebridge's five reportable segments are Individual Retirement, Group Retirement, Life Insurance, Institutional Markets, and Corporate and Other[418](index=418&type=chunk) Segment APTOI Summary | Segment | 3 Months Ended Sep 30, 2022 (APTOI in millions) | 3 Months Ended Sep 30, 2021 (APTOI in millions) | 9 Months Ended Sep 30, 2022 (APTOI in millions) | 9 Months Ended Sep 30, 2021 (APTOI in millions) | |:---|:---|:---|:---|:---| | Individual Retirement | $199 | $257 | $787 | $1,391 | | Group Retirement | $180 | $317 | $569 | $958 | | Life Insurance | $103 | $121 | $151 | $90 | | Institutional Markets | $83 | $142 | $285 | $418 | | Corporate and Other | $(146) | $33 | $(262) | $(97) | [Individual Retirement](index=112&type=section&id=Individual%20Retirement) The segment's APTOI decreased due to lower spread and fee income, driven by declines in variable investment income and assets Individual Retirement Financial Summary | Metric | 3 Months Ended Sep 30, 2022 (in millions) | 3 Months Ended Sep 30, 2021 (in millions) | 9 Months Ended Sep 30, 2022 (in millions) | 9 Months Ended Sep 30, 2021 (in millions) | |:---|:---|:---|:---|:---| | Total Adjusted Revenues | $1,307 | $1,567 | $3,975 | $4,550 | | Total Benefits and Expenses | $1,108 | $1,310 | $3,188 | $3,159 | | Adjusted Pre-Tax Operating Income | $199 | $257 | $787 | $1,391 | - **APTOI decreased by $58 million** for the three months and **$604 million** for the nine months ended September 30, 2022, primarily due to lower spread income and lower fee income[424](index=424&type=chunk) Individual Retirement AUMA | Product | Sep 30, 2022 (AUMA in billions) | Dec 31, 2021 (AUMA in billions) | |:---|:---|:---| | Fixed annuities | $51.0 | $57.8 | | Fixed index annuities | $29.6 | $31.8 | | Variable annuities | $53.9 | $70.6 | | Total Individual Retirement AUMA | $134.5 | $160.2 | - **AUMA decreased by $25.7 billion** from December 31, 2021, driven by lower variable annuities separate account assets and general account assets due to equity market declines and higher interest rates[426](index=426&type=chunk) [Group Retirement](index=116&type=section&id=Group%20Retirement) The segment's APTOI declined due to lower spread income from alternative investments and reduced fee income from lower assets Group Retirement Financial Summary | Metric | 3 Months Ended Sep 30, 2022 (in millions) | 3 Months Ended Sep 30, 2021 (in millions) | 9 Months Ended Sep 30, 2022 (in millions) | 9 Months Ended Sep 30, 2021 (in millions) | |:---|:---|:---|:---|:---| | Total Adjusted Revenues | $677 | $837 | $2,101 | $2,462 | | Total Benefits and Expenses | $497 | $520 | $1,532 | $1,504 | | Adjusted Pre-Tax Operating Income | $180 | $317 | $569 | $958 | - **APTOI decreased by $137 million** for the three months and **$389 million** for the nine months ended September 30, 2022, primarily due to lower spread income and lower fee income[438](index=438&type=chunk) Group Retirement AUMA | Product | Sep 30, 2022 (AUMA in billions) | Dec 31, 2021 (AUMA in billions) | |:---|:---|:---| | In-plan assets | $71.4 | $92.8 | | Out-of-plan proprietary annuity assets | $26.3 | $33.2 | | Advisory and brokerage assets | $11.5 | $13.8 | | Total Group Retirement AUMA | $109.2 | $139.8 | - Net flows remained negative, but **improved by $226 million** for the three months ended September 30, 2022, due to increased deposits and decreased surrenders[448](index=448&type=chunk) [Life Insurance](index=120&type=section&id=Life%20Insurance) The segment's nine-month APTOI increased, driven by favorable mortality and lower expenses, despite a lower impact from assumption updates Life Insurance Financial Summary | Metric | 3 Months Ended Sep 30, 2022 (in millions) | 3 Months Ended Sep 30, 2021 (in millions) | 9 Months Ended Sep 30, 2022 (in millions) | 9 Months Ended Sep 30, 2021 (in millions) | |:---|:---|:---|:---|:---| | Total Adjusted Revenues | $1,128 | $1,104 | $3,500 | $3,515 | | Total Benefits and Expenses | $1,025 | $983 | $3,349 | $3,425 | | Adjusted Pre-Tax Operating Income | $103 | $121 | $151 | $90 | - **APTOI decreased by $18 million** for the three months but **increased by $61 million** for the nine months ended September 30, 2022[455](index=455&type=chunk) Life Insurance AUMA | Metric | Sep 30, 2022 (AUMA in billions) | Dec 31, 2021 (AUMA in billions) | |:---|:---|:---| | Total AUMA | $26.7 | $34.4 | - **AUMA decreased by $7.7 billion** from December 31, 2021, due to net unrealized losses from fixed maturity securities driven by higher rates and widening credit spreads[458](index=458&type=chunk) [Institutional Markets](index=123&type=section&id=Institutional%20Markets) The segment's APTOI decreased, driven by lower spread income from private equity returns and lower underwriting margin Institutional Markets Financial Summary | Metric | 3 Months Ended Sep 30, 2022 (in millions) | 3 Months Ended Sep 30, 2021 (in millions) | 9 Months Ended Sep 30, 2022 (in millions) | 9 Months Ended Sep 30, 2021 (in millions) | |:---|:---|:---|:---|:---| | Total Adjusted Revenues | $1,110 | $848 | $2,444 | $2,627 | | Total Benefits and Expenses | $1,027 | $706 | $2,159 | $2,209 | | Adjusted Pre-Tax Operating Income | $83 | $142 | $285 | $418 | - **APTOI decreased by $59 million** for the three months and **$133 million** for the nine months ended September 30, 2022, primarily due to lower spread income and lower underwriting margin[466](index=466&type=chunk)[468](index=468&type=chunk) Institutional Markets AUMA | Product | Sep 30, 2022 (AUMA in billions) | Dec 31, 2021 (AUMA in billions) | |:---|:---|:---| | SVW (AUA) | $45.8 | $43.8 | | GIC, PRT and Structured settlements (AUM) | $21.4 | $23.9 | | All other (AUM) | $7.6 | $8.8 | | Total AUMA | $74.8 | $76.5 | - **AUMA decreased by $1.7 billion** from December 31, 2021, due to the impact of interest rates on asset valuations and benefit payments, partially offset by premiums and deposits[470](index=470&type=chunk) [Corporate and Other](index=126&type=section&id=Corporate%20and%20Other) The segment reported an adjusted pre-tax operating loss, driven by higher interest expense on financial debt Corporate and Other Financial Summary | Metric | 3 Months Ended Sep 30, 2022 (in millions) | 3 Months Ended Sep 30, 2021 (in millions) | 9 Months Ended Sep 30, 2022 (in millions) | 9 Months Ended Sep 30, 2021 (in millions) | |:---|:---|:---|:---|:---| | Total Adjusted Revenues | $222 | $321 | $667 | $670 | | Total Benefits and Expenses | $242 | $139 | $648 | $508 | | Adjusted Pre-Tax Operating Loss | $(142) | $35 | $(248) | $(98) | - The adjusted pre-tax operating loss was **$142 million** for the three months and **$248 million** for the nine months ended September 30, 2022, an unfavorable change of **$177 million** and **$150 million**, respectively[479](index=479&type=chunk)[480](index=480&type=chunk) - This unfavorable change was primarily due to **higher interest expense on financial debt** from new debt issuances and lower income from consolidated investment entities[479](index=479&type=chunk)[480](index=480&type=chunk) - The nine-month period also saw a favorable change of **$31 million** from other sources, including a **$56 million gain** related to the minority investment in Fortitude Re[480](index=480&type=chunk) [Investments](index=128&type=section&id=Investments) This section provides an overview of Corebridge's investment strategies, portfolio composition, and credit ratings - Investment strategies are tailored to business needs, focusing on income generation, capital preservation, and matching asset characteristics to insurance liabilities[482](index=482&type=chunk)[484](index=484&type=chunk) Investment Portfolio Summary | Category | Sep 30, 2022 (in millions) | Dec 31, 2021 (in millions) | |:---|:---|:---| | Total Bonds available for sale | $151,039 | $198,568 | | Total Fixed Maturities | $155,814 | $200,650 | | Total Mortgage and other loans receivable | $42,539 | $39,388 | | Total Investments | $213,806 | $256,318 | - As of September 30, 2022, **90% of the total fixed maturity portfolio was investment grade**[491](index=491&type=chunk) - Net unrealized losses on fixed maturity securities were **$10.0 billion** for the three months and **$42.3 billion** for the nine months ended September 30, 2022, primarily due to significant increases in interest rates[519](index=519&type=chunk) [Insurance Businesses](index=148&type=section&id=Insurance%20Businesses) This section discusses significant reinsurance agreements, variable annuity guaranteed benefits, and actuarial assumption updates - Corebridge has significant reinsurance agreements with Fortitude Re, ceding approximately **$28.0 billion of reserves** from run-off lines as of September 30, 2022[539](index=539&type=chunk) - Variable annuity products offer GMWB riders, accounted for as embedded derivatives measured at fair value, with an economic hedging program to manage market risk[539](index=539&type=chunk) GMWB Embedded Derivative and Hedge Target | Metric | Sep 30, 2022 (in millions) | Dec 31, 2021 (in millions) | |:---|:---|:---| | Embedded derivative liability | $698 | $2,472 | | Economic hedge target liability | $912 | $2,808 | Deferred Policy Acquisition Costs (DAC) Rollforward | Metric | 3 Months Ended Sep 30, 2022 (in millions) | 3 Months Ended Sep 30, 2021 (in millions) | 9 Months Ended Sep 30, 2022 (in millions) | 9 Months Ended Sep 30, 2021 (in millions) | |:---|:---|:---|:---|:---| | DAC, beginning of period | $12,130 | $7,884 | $7,949 | $7,241 | | Capitalizations | $247 | $254 | $735 | $782 | | Amortization expense (total) | $(334) | $(385) | $(1,302) | $(867) | | DAC, end of period | $13,229 | $7,842 | $13,229 | $7,842 | - The annual update of actuarial assumptions resulted in a **net unfavorable impact to APTOI of $57 million** for the nine months ended September 30, 2022[554](index=554&type=chunk) [Liquidity and Capital Resources](index=153&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses Corebridge's liquidity and capital management, highlighting sufficient resources to meet obligations - Corebridge believes it has **sufficient liquidity and capital resources** to satisfy future requirements and meet obligations, managed through a defined risk management framework[559](index=559&type=chunk) Holding Company Liquidity Sources | Metric | Sep 30, 2022 (in millions) | Dec 31, 2021 (in millions) | |:---|:---|:---| | Cash and short-term investments (Corebridge Hold Cos.) | $2,014 | $1,016 | | Available capacity under committed, revolving credit facility | $2,500 | $0 | | Total Corebridge Hold Cos. liquidity sources | $4,514 | $2,041 | Consolidated Cash Flow Summary | Metric | 9 Months Ended Sep 30, 2022 (in millions) | 9 Months Ended Sep 30, 2021 (in millions) | |:---|:---|:---| | Net cash provided by operating activities | $2,202 | $2,032 | | Net cash used in investing activities | $(3,330) | $(3,044) | | Net cash provided by financing activities | $980 | $1,097 | | Net increase (decrease) in cash and cash equivalents | $(157) | $84 | Credit Ratings | Rating Agency | Hybrid Junior-Subordinated Debt | Senior Unsecured Long-Term Debt | |:---|:---|:---| | Moody's | Baa3 (Stable) | Baa2 (Stable) | | S&P | BBB- (Stable) | BBB+ (Stable) | | Fitch | BBB- (Stable) | BBB+ (Stable) | [Critical Accounting Estimates](index=159&type=section&id=Critical%20Accounting%20Estimates) This section highlights accounting policies most dependent on significant judgment and estimates - Critical accounting estimates involve significant judgment and assumptions, including fair value measurements, valuation of guaranteed benefit features, and estimated gross profits for DAC and URR[592](index=592&type=chunk) - Other critical estimates include the valuation of future policy benefit liabilities, reinsurance assets, goodwill impairment, legal contingencies, and income tax assets and liabilities[592](index=592&type=chunk) - Actual experience differing from assumptions could materially affect the company's financial condition, results of operations, and liquidity[593](index=593&type=chunk) [Glossary](index=160&type=section&id=Glossary) This section provides definitions for key terms used throughout the Management's Discussion and Analysis - Key terms defined include Adjusted Book Value, APTOI, AUM, AUA, AUMA, DAC, GMWB, GMDB, Reinsurance, Risk-based capital, and Underwriting margin[596](index=596&type=chunk)[597](index=597&type=chunk)[600](index=600&type=chunk) [Certain Important Terms](index=163&type=section&id=Certain%20Important%20Terms) This section lists and defines specific capitalized terms used in the report to refer to Corebridge and related entities - Important terms defined include AGC, AGL, AIG, BlackRock, Blackstone, Corebridge Parent, Fortitude Re, and VALIC[603](index=603&type=chunk)[605](index=605&type=chunk) [Acronyms](index=165&type=section&id=Acronyms) This section provides a list of acronyms used in the report, along with their full definitions - Common acronyms defined include AATOI, ABS, APTOI, AUMA, CMBS, DAC, GAAP, GIC, GMDB, GMWB, PRT, RMBS, SEC, and VIE[608](index=608&type=chunk) [ITEM 3. Quantitative and Qualitative Disclosures About Market Risk](index=166&type=section&id=ITEM%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) There have been no material changes to the quantitative and qualitative disclosures about market risk since the company's Prospectus - **No material changes** to quantitative and qualitative disclosures about market risk have occurred since the Prospectus filing[611](index=611&type=chunk) [ITEM 4. Controls and Procedures](index=166&type=section&id=ITEM%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of September 30, 2022 - Disclosure controls and procedures were evaluated and **deemed effective** as of September 30, 2022[612](index=612&type=chunk) - **No material changes** in internal control over financial reporting occurred during the quarter ended September 30, 2022[613](index=613&type=chunk) [Part II – Other Information](index=167&type=section&id=Part%20II%20%E2%80%93%20Other%20Information) [ITEM 1. Legal Proceedings](index=167&type=section&id=ITEM%201.%20Legal%20Proceedings) This section refers to Note 12 of the Condensed Consolidated Financial Statements for information regarding legal proceedings - Information on legal proceedings is detailed in **Note 12** of the Condensed Consolidated Financial Statements[616](index=616&type=chunk) [ITEM 1A. Risk Factors](index=167&type=section&id=ITEM%201A.%20Risk%20Factors) This section directs readers to the 'Risk Factors' discussion in the company's Prospectus for a comprehensive understanding of risks - Readers should carefully consider the risk factors discussed in the **'Risk Factors' section** of the company's Prospectus[617](index=617&type=chunk) [ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=167&type=section&id=ITEM%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) There is no information to report regarding unregistered sales of equity securities and use of proceeds for the period - No information is available for unregistered sales of equity securities and use of proceeds[618](index=618&type=chunk) [ITEM 4. Mine Safety Disclosures](index=167&type=section&id=ITEM%204.%20Mine%20Safety%20Disclosures) This section states that mine safety disclosures are not applicable to the company - Mine Safety Disclosures are **not applicable**[619](index=619&type=chunk) [ITEM 6. Exhibits](index=168&type=section&id=ITEM%206.%20Exhibits) This section lists the exhibits filed with the Quarterly Report on Form 10-Q - Exhibits include interactive data files (iXBRL) for financial statements and various agreements such as the Employee Matters Agreement, Separation Agreement, and Tax Matters Agreement with AIG[621](index=621&type=chunk)[622](index=622&type=chunk) [Signatures](index=169&type=section&id=Signatures) [Signatures](index=169&type=section&id=Signatures) This section contains the required signatures for the Quarterly Report on Form 10-Q, dated November 9, 2022 - The report is signed by Elias Habayeb, Executive Vice President and Chief Financial Officer, and Christopher Filiaggi, Senior Vice President and Controller, on behalf of Corebridge Financial, Inc[625](index=625&type=chunk) - The signing date for the report is **November 9, 2022**[626](index=626&type=chunk)