Equitable(EQH) - 2024 Q4 - Annual Report

Financial Performance - The Individual Retirement segment reported a total First Year Premium (FYP) of $18,560 million for the year ended December 31, 2024, up from $14,226 million in 2023, representing a growth of 30.5%[36] - Gross premiums for the year ended December 31, 2024, were $4,693 million, compared to $3,806 million in 2023, indicating an increase of 23.3%[59] - Total revenues for the year ended December 31, 2024, reached $4,559 million, up from $4,261 million in 2023, marking a year-over-year increase of 7.0%[94] - The Protection Solutions segment's total reserves increased to $36,961 million in 2024, compared to $34,521 million in 2023, reflecting a growth of 7.0%[107] - Total net long-term outflows for actively managed investment services were $2.2 billion in 2024, compared to $7.0 billion in 2023 and $3.6 billion in 2022[90] Assets Under Management (AUM) - Total Assets Under Management (AUM) reached $792.2 billion as of December 31, 2024, up from $725.2 billion in 2023, representing an increase of 9.1%[88] - Average Assets Under Management (AUM) increased to $768.5 billion in 2024 from $680.3 billion in 2023, representing a growth of approximately 12.8%[91] - Institutional clients accounted for 41% of AUM, while retail and private wealth clients represented 42% and 17% respectively as of December 31, 2024[71] - The company’s total AUM by investment service included $331.7 billion in equities, $295.8 billion in fixed income, and $164.7 billion in alternatives/multi-asset solutions as of December 31, 2024[89] Product Performance - Structured Capital Strategies (SCS) contributed $12,205 million to FYP in 2024, an increase of 17.3% from $10,401 million in 2023[36] - The company introduced SCS Income in 2021, a new version of SCS that includes a GMxB feature, enhancing product offerings[34] - The company’s variable annuity products generated $40.654 billion in Account Value (AV) for 2024, compared to $36.470 billion in 2023, reflecting a growth of 11.9%[63] - The company’s tax-exempt AV increased to $29.519 billion in 2024, compared to $26.519 billion in 2023, reflecting a growth of 11.3%[63] - Variable Universal Life (VUL) annualized premiums rose to $223 million in 2024, up from $210 million in 2023, indicating an increase of 6.2%[103] Distribution Channels - Equitable Advisors represented 35% of the variable annuity FYP in 2024, while third-party distribution channels accounted for 65%[39] - The distribution channels for sales comprised approximately 66% through Equitable Advisors and 34% through third-party firms in 2024[64] - The total first year premium from third-party distribution increased to $793 million in 2024, a significant rise from $390 million in 2023[65] Market Strategy - The company targets affluent and high net worth individuals, with a focus on retirement income and tax-deferred growth opportunities[37] - The company aims to expand its presence in the tax-exempt 403(b)/457(b) markets, which represent 53% of FYP in the Group Retirement segment for 2024[60] - The Institutional lifetime income market accounted for 15% of the Group Retirement business, highlighting a diverse revenue stream[49] Regulatory Environment - Equitable Financial is primarily regulated by the Superintendent of the NYDFS, with oversight in all 50 states and territories[154] - The RBC of each insurance subsidiary of Equitable Financial was in excess of the required RBC levels as of the most recent annual statutory financial statements[179] - New York's Regulation 213 significantly increases the statutory basis reserves for variable annuity obligations, potentially affecting the capacity to distribute dividends[176] - The NAIC's Liquidity Stress Test and Group Capital Calculation (GCC) framework were codified in New York in August 2023, with the first GCC filing required by June 30, 2024[171] Investment Management - Approximately $12.1 billion of private placements were transferred from Taxable Fixed Income into Alternatives/Multi-Asset during the three months ended September 30, 2024[92] - Actively managed fixed income services saw inflows of $24.6 billion in 2024, a significant increase from $12.3 billion in 2023[90] - Performance-based fees for investment advisory services increased to $271 million in 2024, compared to $145 million in 2023, representing an increase of 86.2%[93] Technology and Innovation - The company emphasizes continuous investment in technology and digital capabilities to enhance advisor productivity and client satisfaction[125] - Equitable Advisors has approximately 4,600 financial advisors, focusing on deep client relationships and integrated technology[125] Life Insurance Market - The life insurance industry remains competitive, with no single company dominating the market, emphasizing the importance of product features, pricing, and service[113] - The total in-force face amount for life insurance products decreased to $409.2 billion in 2024 from $412.3 billion in 2023, a decline of 0.8%[107] - Individual life insurance annualized premium increased to $241 million in 2024, up from $232 million in 2023, representing a growth of 3.9%[112] Employee Benefits - Employee benefits gross premiums rose to $439 million in 2024, compared to $372 million in 2023, reflecting a significant increase of 18%[118] - The annualized premium for employee benefits increased to $120 million in 2024, up from $104 million in 2023, a rise of 15.4%[118] - Group life insurance sales grew to $148 million in 2024, up from $127 million in 2023, marking a 16.5% increase[118] Reinsurance Transactions - Equitable Financial reinsured all variable annuity contracts issued outside New York prior to October 1, 2022, to its affiliate, Equitable America, effective April 1, 2023[145] - Equitable Financial ceded 90% of its fixed deferred annuity business sold prior to 2015 to a non-affiliated reinsurer on a coinsurance basis[145] - Equitable Financial completed a reinsurance transaction in May 2023, reinsuring virtually all net retained General Account liabilities to mitigate the impacts of Regulation 213[177] Compliance and Risk Management - The company is subject to extensive regulation by the SEC and FINRA, including capital requirements and sales practices scrutiny for its broker-dealer subsidiaries[190] - The Dodd-Frank Act and related regulations expose the company to operational, compliance, and execution risks, including central counterparty insolvency risk[207] - The NAIC's Risk Management and Own Risk and Solvency Assessment Model Act mandates insurers to maintain a risk management framework and conduct internal risk assessments[166]