Group 1 - The company is transitioning towards a more fee-based, capital-light business model, moving away from traditional annuity sales and asset retention [1] - Over the past six years, the company has more than doubled its Assets Under Management (AUM) and earnings primarily through annuity sales [1] - The launch of a sidecar with Blackstone and various reinsurance deals are part of the strategy to enhance return on equity by focusing on distribution rather than asset holding [1] Group 2 - The company has invested approximately $700 million in acquiring distribution channels, which are performing well [2] - These distribution properties are generating about $85 million in EBITDA [2]

Summary of F&G Annuities & Life FY Conference Call Company Overview - **Company**: F&G Annuities & Life (NYSE: FG) - **Date**: September 08, 2025 - **Speakers**: Chris Blunt (CEO), Conor Murphy (CFO) Key Points Strategic Transformation - F&G Annuities & Life is transitioning to a more fee-based, capital-light business model, moving away from traditional annuity sales and asset retention [2][3] - The company has doubled its Assets Under Management (AUM) and earnings over the past six years, primarily through annuity sales [2] Capital-Light Model - The introduction of a $1 billion sidecar with Blackstone and various reinsurance deals is aimed at enhancing capital efficiency [2][3] - The capital requirements for reinsured sales are significantly lower, with upfront capital dropping from 15% to 7.5% [4] Product Focus - Core products include Fixed Indexed Annuities (FIAs) and Indexed Universal Life Insurance, with a strong emphasis on growing these lines [5][6] - The company is a top 10 seller in several product categories, including Indexed Universal Life Insurance and Pension Risk Transfer [5] Distribution Strategy - F&G has invested approximately $700 million in owning distribution channels, generating about $85 million in EBITDA [2][24] - The company aims to consolidate smaller players into larger platforms to enhance growth and profitability [15][25] Market Dynamics - The company is experiencing increased competition in the annuity market, particularly in Multi-Year Guarantee Annuities (MIGAs) [26][28] - Despite competition, the company maintains strong margins in FIAs due to the ability to reprice contracts annually [61] Capital Deployment - The company raised capital earlier in the year to accelerate growth opportunities, not due to immediate capital needs [11][12] - Priorities for capital deployment include expanding distribution, writing more FIAs, and pursuing Pension Risk Transfer solutions [15][16] Pension Risk Transfer Market - F&G competes in the $100 million to $1 billion segment of the Pension Risk Transfer market, maintaining a consistent pricing strategy [40][41] - The company has not faced significant regulatory pressures and aims to sustain its market share [41][42] Rating Agency Relations - F&G believes it deserves a higher rating than currently assigned, which could enhance its competitive position in the market [43][44] - The company has doubled its business and cash flow since the last rating upgrade, indicating strong operational performance [44] Alternative Investments - The company has a significant allocation to alternative investments, primarily in private equity and real estate, which are expected to yield long-term returns [52][53] - The volatility associated with alternative investments is acknowledged, but the company remains optimistic about their potential [51] Spread Dynamics - There has been some spread compression in retained business, but this has been offset by reinsurance benefits and improved distribution margins [60][61] - The company is focused on maintaining competitive spreads in its core products, particularly FIAs and IULs [61] Future Outlook - The rollover business from 401(k) plans is expected to grow significantly over the next 20 years, presenting a substantial opportunity for F&G [36][37] - The company anticipates continued demand for its products, driven by demographic trends and market conditions [36][37] Conclusion - F&G Annuities & Life is strategically positioning itself for growth through a capital-light model, enhanced distribution capabilities, and a focus on core products. The company is optimistic about future market opportunities and aims to maintain its competitive edge through effective capital deployment and operational efficiency.

Company Update - F&G has had a busy year with significant activities including capital raising and a new reinsurance partnership [1] - The company has made strategic expense actions to enhance its operational efficiency [1] - Conor Murphy has joined as CFO and President, contributing positively to the company's culture and operations [2] Leadership Changes - The addition of Conor Murphy is viewed as a strategic move, especially with anticipated senior retirements within the company [2] - The leadership team is focused on maintaining a strong cultural fit while integrating new talent [2] Strategic Initiatives - The sidecar initiative is highlighted as a significant development, potentially more impactful than investors may realize [3]

Summary of F&G Conference Call Company Overview - **Company**: F&G (Fidelity & Guaranty Life) - **Industry**: Life Insurance and Annuities Key Points and Arguments Company Positioning and Strategy - F&G has undergone significant changes, including capital raising and a new reinsurance partnership, positioning itself for a more capital-light strategy with a focus on distribution rather than being a balance sheet-heavy company [3][4] - The company has committed $1 billion in capital to pursue this strategy, indicating a shift towards being a distributor for other companies' balance sheets [3] Retail Annuity Sales Growth - The industry has seen a substantial increase in annual annuity sales, from $250 billion to an expected $450 billion this year, attributed to demographic trends and increased acceptance of annuities by financial advisors [5][6] - The penetration rate of fixed annuities remains low, suggesting significant growth potential in this area [5] Competitive Environment - The annuity market has become increasingly competitive, particularly in the Multi-Year Guarantee Annuities (MYGA) space, where sales volume fluctuated significantly [8][9] - F&G maintains a stable business in Fixed Indexed Annuities (FIA), which is considered foundational for the company [9] Expense Management - F&G has taken actions to manage expenses due to spread pressure, aiming to improve the expense ratio by about 10 basis points [4][28] - The company has grown rapidly, leading to a reassessment of its project load and expense base [4] Pension Risk Transfer (PRT) Market - F&G focuses on the $100 million to $1 billion range in the PRT market, with a consistent pipeline of deals and a target of $1.5 to $2.5 billion in annual transactions [21][22] Return on Assets Target - F&G has set a five-year target for return on assets (ROA) of 133 to 155 basis points, with current performance at 129 basis points, indicating progress towards this goal [24][25][27] Reinsurance Strategy - The reinsurance strategy allows F&G to reduce capital requirements significantly, enhancing return on capital and positioning the company as a distributor rather than a balance sheet player [36][37] - The partnership with Blackstone is highlighted as a key component of this strategy, providing access to various asset classes [36][50] Life Insurance Business Performance - F&G's life insurance segment is performing well, with a focus on middle-market and cultural markets, contributing significantly to sales and profitability [57][58] - The company has a strong market share in Indexed Universal Life Insurance, ranking number six in sales [58] Investment Strategy and Market Conditions - The company is cautious about credit spreads and is not willing to stretch for returns, focusing on maintaining a stable investment portfolio [49][50] - F&G has a diversified asset allocation strategy, reducing exposure to floating rate assets as interest rates fluctuate [51] Regulatory Environment - The new NAIC rule on asset adequacy testing for reinsurance is not expected to have a significant impact on F&G, as the company is already compliant with rigorous testing standards [52][53] Future Outlook - F&G is optimistic about its growth trajectory, particularly in the annuity and life insurance markets, and is focused on leveraging its distribution strategy for future success [38][44] Additional Important Insights - The company is investing in technology and operational improvements to enhance productivity and scalability [34][32] - F&G's unique position in the market allows it to capitalize on opportunities in both the annuity and life insurance sectors, with a strong emphasis on independent distribution [44][58]

Group 1 - F&G Annuities & Life, Inc. will participate in a fireside chat at the Barclays Global Financial Services Conference on September 8, 2025 [1] - The chat will feature CEO Chris Blunt and CFO Conor Murphy, scheduled for 2:45 pm Eastern Time [1] - The event will be available for live streaming and replay via audio webcast on the company's investor website [1] Group 2 - F&G Annuities and Life, Inc. is a leading provider of insurance solutions, serving both retail annuity and life customers as well as institutional clients [2] - The company is headquartered in Des Moines, Iowa, and is focused on helping Americans achieve their aspirations [2]

PART I. FINANCIAL INFORMATION [Item 1. Condensed Consolidated Financial Statements](index=4&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements:) This section presents the unaudited condensed consolidated financial statements for the company as of and for the periods ended June 30, 2025 [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets%20(unaudited)) Total assets grew to $91.8 billion, driven by increases in investments, while total equity rose to $4.6 billion Condensed Consolidated Balance Sheets Highlights (in millions) | Balance Sheet Item | June 30, 2025 (Unaudited) | December 31, 2024 | | :--- | :--- | :--- | | Total investments | $64,589 | $60,109 | | **Total assets** | **$91,816** | **$84,931** | | Contractholder funds | $59,813 | $56,404 | | **Total liabilities** | **$87,259** | **$80,855** | | **Total equity** | **$4,557** | **$4,076** | [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20(unaudited)) Net earnings attributable to common shareholders decreased significantly to $35 million in Q2 2025 from $198 million in Q2 2024 Key Operating Results (in millions, except per share data) | Metric | Q2 2025 | Q2 2024 | 6 Months 2025 | 6 Months 2024 | | :--- | :--- | :--- | :--- | :--- | | Total revenues | $1,364 | $1,172 | $2,272 | $2,741 | | Total benefits and expenses | $1,307 | $918 | $2,241 | $2,345 | | Net earnings | $42 | $204 | $21 | $320 | | Net earnings attributable to F&G common shareholders | $35 | $198 | $10 | $309 | | Diluted EPS | $0.26 | $1.55 | $0.08 | $2.45 | [Condensed Consolidated Statements of Comprehensive Income (Loss)](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%20(Loss)%20(unaudited)) Comprehensive income for Q2 2025 was $104 million, a decrease from $133 million in the prior-year period Comprehensive Income (Loss) Highlights (in millions) | Metric | Q2 2025 | Q2 2024 | 6 Months 2025 | 6 Months 2024 | | :--- | :--- | :--- | :--- | :--- | | Net earnings | $42 | $204 | $21 | $320 | | Other comprehensive income (loss) | $64 | $(70) | $253 | $37 | | Comprehensive income (loss) attributable to F&G | $104 | $133 | $272 | $355 | [Condensed Consolidated Statements of Equity](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Equity%20(unaudited)) Total equity increased to $4.56 billion, primarily due to common stock issuance and other comprehensive income - Key equity changes for the six months ended June 30, 2025 include an issuance of common stock of **+$269 million**, net earnings of **+$19 million**, other comprehensive income of **+$253 million**, and common and preferred stock dividends declared of **-$65 million**[19](index=19&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20(unaudited)) A net decrease in cash of $380 million was driven by higher net cash used in investing activities Cash Flow Summary for Six Months Ended June 30 (in millions) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $2,576 | $2,589 | | Net cash used in investing activities | $(4,273) | $(3,229) | | Net cash provided by financing activities | $1,317 | $2,603 | | **Net (decrease) increase in cash** | **$(380)** | **$1,963** | [Notes to Unaudited Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) This section details accounting policies and financial data covering fair value, investments, derivatives, reinsurance, and regulatory matters [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=74&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial performance, key business trends, investment portfolio composition, liquidity, and capital resources - Key business trends include market conditions, the interest rate environment, and the **aging of the U.S. population**, which is expected to increase demand for retirement products[285](index=285&type=chunk)[289](index=289&type=chunk)[291](index=291&type=chunk) - The company operates in three retail channels and two institutional markets, leveraging a **strategic partnership with Blackstone**[295](index=295&type=chunk) - Profitability is driven by **Assets Under Management (AUM)**, the spread between net investment income and costs, reinsurance fee income, and distribution margin[304](index=304&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=102&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company outlines its primary market risk exposures, including interest rate, equity price, and foreign currency exchange rate risks - A **100 basis point increase** in interest rates would decrease the fair value of fixed maturity securities by approximately **$2.9 billion**[419](index=419&type=chunk) - A **10% decrease** in market prices would lead to a net decrease in the fair value of the equity securities portfolio by approximately **$34 million**[420](index=420&type=chunk) - The company **hedges substantially all** of its foreign currency exposure, primarily related to the Euro, using various derivative instruments[421](index=421&type=chunk) [Controls and Procedures](index=103&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal controls - Management concluded that as of June 30, 2025, the company's disclosure controls and procedures were **effective**[428](index=428&type=chunk) - **No changes** in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, the company's internal controls[431](index=431&type=chunk) PART II. OTHER INFORMATION [Legal Proceedings](index=105&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in ordinary course litigation, including disputes over commission payments and a data compromise from a third-party vendor - The company is a defendant in a lawsuit alleging failure to pay **over $162 million in commissions** and other damages, which it is vigorously contesting[250](index=250&type=chunk) - F&G is a defendant in two putative class action lawsuits related to a data breach involving the **MOVEit file transfer software** used by a third-party vendor[252](index=252&type=chunk)[253](index=253&type=chunk) [Risk Factors](index=105&type=section&id=Item%201A.%20Risk%20Factors) This section updates risk factors, primarily concerning the Department of Labor's new "Fiduciary Rule" and its potential impact on business operations - The DOL released a new **"Fiduciary Rule"** in April 2024, which significantly expands the definition of an "investment advice fiduciary" under ERISA[437](index=437&type=chunk) - In July 2024, a U.S. District Court **stayed the effective date** of the new rule, a ruling which the DOL has appealed[439](index=439&type=chunk)[441](index=441&type=chunk) - The final outcome is uncertain, but if implemented, the rule could **materially affect agent business practices** and adversely impact F&G's business[442](index=442&type=chunk) [Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities](index=107&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities,%20Use%20of%20Proceeds,%20and%20Issuer%20Purchases%20of%20Equity%20Securities) No shares were repurchased during the quarter under the company's stock repurchase program, with $32 million remaining authorized - **No shares were repurchased** during the three months ended June 30, 2025[445](index=445&type=chunk) - As of June 30, 2025, approximately **$32 million remains authorized** for repurchase under the current stock repurchase program[445](index=445&type=chunk) [Defaults Upon Senior Securities](index=107&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reports no defaults upon senior securities during the period - There were **no defaults** upon senior securities during the period[447](index=447&type=chunk) [Mine Safety Disclosures](index=107&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section is not applicable to the company's operations - This item is **not applicable** to the company[448](index=448&type=chunk) [Other Information](index=108&type=section&id=Item%205.%20Other%20Information) No director or officer adopted or terminated a Rule 10b5-1 trading arrangement during the second quarter of 2025 - **No director or officer** adopted or terminated a Rule 10b5-1 trading arrangement during the quarter[449](index=449&type=chunk) [Exhibits](index=108&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the report, including required CEO and CFO certifications and XBRL data files - The report includes **certifications from the CEO and CFO** as required by the Sarbanes-Oxley Act of 2002[452](index=452&type=chunk)

Financial Data and Key Metrics Changes - The company reported adjusted net earnings of $103 million or $0.77 per share for the second quarter, with investment income from alternative investments at $83 million or $0.62 per share, below long-term expectations [17] - Adjusted return on assets (ROA) was 92 basis points, compared to 91 basis points in the same quarter of the previous year, while adjusted return on equity (ROE) was 8.8%, up 40 basis points year-over-year [19] Business Line Data and Key Metrics Changes - Gross sales reached $4.1 billion in the second quarter, with core sales of fixed index annuities, index life, and pension risk transfer totaling $2.2 billion, up 22% sequentially and 10% year-over-year [6][9] - MYGA sales were a record $1.9 billion in the second quarter, a 73% increase over the previous quarter but down 21% from the same quarter last year [8] Market Data and Key Metrics Changes - The total annuity market has expanded, driven by strong consumer demand and favorable demographics, with the aging population seeking guaranteed income streams [5] - The company reported record assets under management (AUM) before flow reinsurance of $69.2 billion, a 137% increase compared to the previous year [10] Company Strategy and Development Direction - The company is transitioning towards a more fee-based, higher-margin, and less capital-intensive business model, supported by the launch of a new reinsurance vehicle in partnership with Blackstone [4][12] - The reinsurance sidecar is expected to enhance ROE over time and is part of a broader strategy to optimize capital allocation [20][22] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, highlighting the strong second quarter results and the potential for continued growth in fee-based earnings [24] - The company remains focused on managing profitability and optimizing return on capital while navigating industry dynamics and macroeconomic conditions [24] Other Important Information - An executive management transition was announced, with Connor Murphy taking on the role of President in addition to his current role as CFO [12] - The company has invested nearly $700 million in its own distribution company, reflecting a commitment to diversifying its business model [22] Q&A Session Summary Question: What is the expected capacity of the new sidecar and how quickly can it be filled? - Management indicated that the sidecar could provide multiple billions in capacity, depending on product type, and is part of a strategy for a more capital-light approach [27] Question: What does the capital-light path mean for potential consolidation? - Management emphasized the importance of smart capital allocation and expressed excitement about the growth of own distribution, which is generating strong returns [29][30] Question: How are MYGA sales shaping up for Q3? - Management expects a more normalized rate for MYGA sales, with potential volatility, but anticipates higher indexed annuity sales due to the new sidecar [38] Question: How do you see the funding agreements shaping up? - Management noted that the funding agreement market looks attractive and will be closely monitored in the upcoming quarter [41] Question: What is the balance of opportunity between FIAs and RILAs? - Management expressed confidence in both FIAs and RILAs, noting significant growth in RILAs relative to their size, but emphasized that FIAs remain a core product [43] Question: What is the walk from Q2 ROA to Investor Day targets? - Management provided insights on tracking towards Investor Day targets, indicating progress in ROA and expense ratio improvements [45][47]

Financial Data and Key Metrics Changes - The company reported adjusted net earnings of $103 million or $0.77 per share for the second quarter, reflecting asset growth and higher fee income [17] - Adjusted return on assets (ROA) was 92 basis points, compared to 91 basis points in the same period last year [19] - Adjusted return on equity (ROE), excluding AOCI, was 8.8%, up 40 basis points from the previous year [19] Business Line Data and Key Metrics Changes - Gross sales reached $4.1 billion in the second quarter, marking one of the best sales quarters in history [6] - Core product sales, including fixed index annuities, index life, and pension risk transfer, totaled $2.2 billion, up 22% sequentially and 10% year-over-year [6][7] - MYGA sales were a record $1.9 billion in the second quarter, a 73% increase from the previous quarter but down 21% from the same quarter last year [8] Market Data and Key Metrics Changes - The total annuity market has expanded due to strong consumer demand and favorable demographics, with the aging population seeking guaranteed income streams [5] - The company reported record assets under management (AUM) before flow reinsurance of $69.2 billion, a 137% increase compared to the previous year [11] Company Strategy and Development Direction - The company is transitioning towards a more fee-based, higher-margin, and less capital-intensive business model, supported by the launch of a new reinsurance vehicle in partnership with Blackstone [4][20] - The reinsurance sidecar is expected to enhance ROE over time and is part of a broader strategy to optimize capital allocation [20][21] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, highlighting the strong second quarter results and the potential for continued growth in fee-based earnings [23] - The company aims to improve its operating expense ratio from 60 basis points at year-end 2024 to approximately 50 basis points by year-end 2025 [18] Other Important Information - An executive management transition was announced, with Connor Murphy taking on the role of President in addition to his current role as CFO [14] - The company has invested nearly $700 million in its own distribution company, reflecting a commitment to growing this segment [22] Q&A Session Summary Question: What is the expected capacity of the new sidecar with $1 billion in commitments? - Management indicated that the capacity could be multiple billions, depending on product type, and emphasized the strategic importance of moving towards a capital-light path [27] Question: How are MYGA sales shaping up for Q3? - Management expects a more normalized rate for MYGA sales, with potential volatility, but anticipates a higher level of indexed annuity sales due to the new sidecar [38] Question: What is the outlook for funding agreements? - Management noted that the funding agreement market looks reasonably attractive and will be closely monitored in Q3 [41] Question: How does the company plan to maintain its crediting rates? - Management stated that they regularly review in-force crediting actions and have a good track record of maintaining consistent spreads [54]

Financial Performance - F&G reported strong 2Q25 performance with $4.1 billion in gross sales, a 41% increase compared to 1Q25[4] - Net sales reached $2.7 billion in 2Q25, up 23% from 1Q25[4] - Assets Under Management (AUM) increased to $55.6 billion, a 7% year-over-year increase[4] - AUM before flow reinsurance rose to $69.2 billion, a 13% year-over-year increase[4] - The adjusted Return on Equity (ROE) was 8.8% for 1H25, a 40 bps increase year-over-year[4] - F&G returned $65 million of capital to shareholders in 1H25[4, 92] Investment Portfolio - The investment portfolio is conservatively positioned and well-diversified, with fixed income being 97% investment grade[52, 58] - The portfolio includes $13 billion in structured credit, $9 billion in mortgage loans, and $9 billion in private origination[61, 62, 66] - Alternative LPs comprise 6% of the total portfolio, with a NAV of $2.9 billion[58, 144, 145] Strategic Goals - F&G aims to grow AUM by 50%, expand adjusted ROA to 1.33%-1.55%, and increase adjusted ROE to 13%-14%[19] - The company is focused on margin expansion through retained business, flow reinsurance, and owned distribution[17]

Core Insights - F&G Annuities & Life (NYSE: FG) has experienced a decline of approximately 15% in its stock value over the past year, raising concerns about the company's future prospects [1] Company Performance - The company has faced challenges due to a questionable equity issuance and a weak quarterly performance, which have contributed to investor concerns [1]