BRIGHTHOUSE FINA(BHFAP) - 2025 Q4 - Annual Report

Assets Under Management (AUM) - Total Assets Under Management (AUM) for Annuities segment increased to $152.745 billion in 2025 from $149.120 billion in 2024, reflecting a growth of approximately 1.8%[29] - Life segment AUM rose to $15.821 billion in 2025, up from $15.751 billion in 2024, indicating a slight increase of 0.4%[29] - Run-off segment AUM remained stable at $26.900 billion in 2025 compared to $26.370 billion in 2024, showing a marginal increase of 2.0%[29] - Corporate & Other segment AUM decreased to $10.691 billion in 2025 from $11.782 billion in 2024, representing a decline of approximately 9.2%[29] Insurance Liabilities - Total insurance liabilities for annuity products reached $138.737 billion in 2025, compared to $138.210 billion in 2024, marking a growth of 0.4%[32] - The total insurance liabilities for life insurance products increased from $15,455 million in 2024 to $16,043 million in 2025, reflecting a growth of approximately 3.8%[82] - The total insurance liabilities for the Run-off segment increased from $26,880 million in 2024 to $26,885 million in 2025, indicating a slight growth[95] Annuity Products and Revenue - Variable annuity contracts generated fee revenue of $2.5 billion in 2025, down from $2.6 billion in 2024, reflecting a decrease of approximately 3.8%[44] - Shield Annuities deposits reached $8,008 million in 2025, up from $7,671 million in 2024 and $6,857 million in 2023, indicating a growing consumer demand[57] - Total deposits for variable annuities, including GMWBs and GMDBs, amounted to $8,715 million in 2025, compared to $8,300 million in 2024 and $7,503 million in 2023[57] Risk Management and Reinsurance - The company maintains a strong capital base and excess liquidity at the holding company to support financial strength ratings and risk management strategies[27] - The company’s reinsurance strategy includes ceding certain risks to third-party reinsurers to limit losses and provide capacity for future growth[97] - The company retains liability up to a specified amount under excess of retention reinsurance agreements, with the reinsurer responsible for amounts above that[100] - The total reinsurance recoverables amount to $6.47 billion as of December 31, 2025, with MetLife, Inc. holding the largest share at $3.399 billion[103] Regulatory Environment - The company is subject to risk-based capital (RBC) requirements, which assess the minimum statutory capital needed based on size and risk profile, ensuring compliance with regulatory standards[127] - The NAIC adopted Actuarial Guideline LV ("AG 55") for asset adequacy testing, effective for year-end 2025 reporting, which may impact future business operations[130] - The NAIC established a new principle-based reserving framework for non-variable annuities, effective January 1, 2026, with a three-year implementation period[131] - The NAIC's amendments to the Valuation Manual require the use of a new Generator of Economic Scenarios ("GOES") for market risk calculations, effective January 1, 2026, with adoption required by December 31, 2026[132] Sales and Distribution - The relative percentage of annuity sales by independent financial planners was 57% for the year ended December 31, 2025, with the top five distributors contributing 15%, 13%, 12%, 11%, and 7% of total deposits[115] - Life insurance sales were predominantly distributed through financial intermediaries, accounting for 88% of total sales in 2025, with the top five distributors producing 28%, 25%, 20%, 10%, and 4% of sales[116][117] Corporate Social Responsibility and Employee Engagement - Brighthouse Financial established the Brighthouse Financial Foundation in 2017 to improve financial security and opportunities in communities, providing resources to tax-exempt organizations[206] - The company launched Brighthouse Scholar Connections, Inc. in 2022 to offer scholarships to historically underrepresented or disadvantaged students, with employees serving as mentors[206] - The company is committed to fostering an inclusive workplace to attract and retain diverse talent, enhancing its competitive position[204] Leadership and Governance - Brighthouse Financial's executive team includes Eric T. Steigerwalt as President and CEO since August 2017, with extensive experience in financial services[208] - The company emphasizes the importance of monitoring its website for material disclosures in compliance with SEC regulations[212] - Brighthouse Financial cautions against relying on forward-looking statements, highlighting the risks and uncertainties associated with such statements[214]