F&G Annuities & Life(US:FG)2025-05-08 20:40Financial Performance - Total revenues for Q1 2025 were $908 million, a decrease of 42% from $1,569 million in Q1 2024 [301]. - Net earnings attributable to common shareholders for Q1 2025 were $(25) million, compared to $111 million in Q1 2024 [301]. - Life insurance premiums and other fees decreased to $489 million in Q1 2025 from $718 million in Q1 2024, reflecting a decline in life-contingent pension risk transfer premiums [303]. - Total annuity sales for Q1 2025 were $2,023 million, down from $2,764 million in Q1 2024 [301]. - The company reported a net loss before income taxes of $(26) million for Q1 2025, compared to a profit of $142 million in Q1 2024 [301]. - Adjusted net earnings for the three months ended March 31, 2025, were $91 million, which included a $16 million reinsurance true-up adjustment, while for the same period in 2024, adjusted net earnings were $108 million [325]. - Operating cash flow for the three months ended March 31, 2025, was $956 million, a decrease from $1,534 million for the same period in 2024 [379]. Annuity Market Trends - The fixed index annuity market grew from nearly $12 billion in sales in 2002 to $130 billion in sales in 2024, while the registered index-linked annuities market increased from $17 billion in 2019 to $62 billion in 2024 [275]. - The aging U.S. population is expected to increase demand for indexed annuity and indexed universal life products, with over 10,000 Americans turning 65 every day [274]. - Indexed annuity sales increased slightly to $1,461 million in Q1 2025 from $1,437 million in Q1 2024, while fixed rate annuities sales decreased significantly from $1,327 million to $562 million [301]. Investment Portfolio - The fair value of the company's investment portfolio as of March 31, 2025, was approximately $60.2 billion, an increase from $59.5 billion as of December 31, 2024 [327]. - The company's fixed maturity available-for-sale securities totaled $47.9 billion as of March 31, 2025, representing 79% of the total investment portfolio [327]. - The top ten concentrations of the company's fixed maturity and equity securities accounted for 74% of the total fair value as of March 31, 2025, with CLOs valued at $9.3 billion, making up 19% of the total [334]. - As of March 31, 2025, 64% of the fixed income portfolio was rated AAA/AA/A, while 32% was rated BBB [332]. - The fair value of AAA/AA/A rated securities in the AFS CLO portfolio increased to $6,673 million, representing 72% of the total portfolio as of March 31, 2025, compared to 63% on December 31, 2024 [343]. Macroeconomic Factors - The company anticipates various macroeconomic factors will continue to drive uncertainty and instability, impacting financial performance in fiscal year 2025 [269]. - The company is unable to predict the duration of the current market environment or its financial impacts due to increasing uncertainty [270]. Cost Management - Personnel costs and other operating expenses decreased to $108 million in Q1 2025 from $124 million in Q1 2024, a reduction of 12.9% [321]. - Interest expense increased to $40 million in Q1 2025 from $30 million in Q1 2024, reflecting a 33.3% rise due to new debt issuances [322]. Cash Flow and Financing Activities - Cash flows from financing activities for Q1 2025 were $882 million, up from $659 million in Q1 2024, driven by higher net contractholder deposits [381]. - The company completed a public offering of 8,000,000 shares of common stock at $33.60 per share, with net proceeds intended for general corporate purposes [369]. - As of March 31, 2025, cash and cash equivalents totaled $3,293 million, an increase from $2,264 million as of December 31, 2024 [374]. Risk Management - The company began executing pay-float and receive-fixed interest rate swaps in 2023 to reduce market risks from interest rate changes [284]. - Market risk benefit losses for the three months ended March 31, 2025, were $109 million, compared to losses of $(11) million in 2024 [318].