Equitable(US:EQH)2024-02-25 16:00Financial Performance - The Individual Retirement segment reported a total First Year Premium (FYP) of $14,145 million for the year ended December 31, 2023, an increase of 24.5% from $11,363 million in 2022[33]. - Structured Capital Strategies (SCS) contributed $10,401 million to FYP in 2023, up from $7,953 million in 2022, representing a growth of 30.7%[33]. - The Retirement Cornerstone product generated $1,806 million in FYP for 2023, a 11.1% increase compared to $1,626 million in 2022[33]. - Gross premiums for the year ended December 31, 2023, were reported at $3,806 million, a decrease from $4,448 million in 2022[57]. - Total first year premiums (FYP) for 2023 were $1,581 million, down from $2,118 million in 2022, representing a decline of 25.5%[60]. - The total renewal premiums for 2023 were $2,225 million, a slight decrease of 4.5% from $2,330 million in 2022[60]. - Total Gross Premiums for 2023 were $2,760 million, a decrease of 1.04% from $2,789 million in 2022[114]. - First Year Premium (FYP) increased to $363 million in 2023, up 6.14% from $342 million in 2022[114]. Distribution Channels - Equitable Advisors represented 32% of the variable annuity FYP in 2023, while third-party distribution channels accounted for 67%[39]. - The only single distribution firm contributing more than 10% of sales in 2023 was JP Morgan Securities, LLC, which contributed 11.0%[42]. - Equitable Advisors generated $1,242 million in first year premiums in 2023, an increase of 4.6% from $1,187 million in 2022[69]. - Equitable Advisors accounted for 95% of the company's 403(b) sales in 2023, highlighting the dominance of this distribution channel[68]. Assets Under Management - The total assets under management (AUM) for the Investment Management and Research business reached approximately $725.2 billion as of December 31, 2023[77]. - Total Assets Under Management (AUM) reached $725.2 billion as of December 31, 2023, up from $646.4 billion in 2022, but down from $778.6 billion in 2021[97]. - Actively Managed Equity AUM decreased to $247.5 billion in 2023 from $287.6 billion in 2021, while Passively Managed Equity AUM increased to $62.1 billion from $53.8 billion in 2022[97]. - The average AUM for Institutions was $304.6 billion in 2023, slightly down from $308.4 billion in 2022[99]. - Institutional assets under management increased to $488 million in 2023 from $468 million in 2022, showing a growth of 4.3%[66]. Revenue and Earnings - Total revenues for the year ended December 31, 2023, were $4,261 million, compared to $4,120 million in 2022[102]. - Investment advisory and services fees for Institutions increased to $666 million in 2023 from $586 million in 2021, while Retail fees decreased to $1,276 million from $1,442 million in 2021[101]. - The Group Retirement business is a stable contributor to earnings, primarily generating revenue from fee income and investment income[49]. Life Insurance Products - Life insurance products represented 91% of total life insurance annualized premium in 2023, with Variable Universal Life (VUL) being the most significant contributor[104]. - Total individual life insurance annualized premiums increased to $232 million in 2023 from $210 million in both 2022 and 2021[112]. - The in-force portfolio includes core product offerings and past generation products, with a focus on aligning performance to pricing expectations[115]. - Total in-force face amount decreased to $412.3 billion in 2023 from $417.0 billion in 2022, a decline of 1.68%[116]. - Protection Solutions Reserves increased to $34,521 million in 2023, up 8.36% from $31,842 million in 2022[116]. Risk Management and Compliance - The company has implemented risk management transactions to minimize risks associated with its legacy business segment after discontinuing certain products[144]. - The company uses a combination of hedging and reinsurance programs to manage risks associated with in-force contracts across various segments[149]. - The company has introduced managed volatility funds to reduce equity exposure during high market volatility periods[158]. - The company uses derivatives to mitigate risks associated with variable annuity products, but faces potential economic losses due to ineffective hedging or adverse market events[212]. Regulatory Environment - Equitable Financial is primarily regulated by the Superintendent of the New York Department of Financial Services (NYDFS) and is subject to extensive regulation across all 50 states[162]. - The RBC (Risk-Based Capital) of each of the company's insurance subsidiaries was in excess of the required RBC levels as of the most recent annual statutory financial statements filed with insurance regulators[186]. - The company relies on dividends from its subsidiaries to meet obligations, and any limitations on Equitable Financial's dividend capacity could materially affect the company's ability to return capital to stockholders[168]. - New York's Regulation 213 requires insurers to carry statutory basis reserves for variable annuity contract obligations that could adversely affect their capacity to distribute dividends[182]. - The company has received and responded to inquiries from state attorneys general and other state officials regarding compliance with certain state insurance and securities laws[164]. Strategic Initiatives - The company plans to grow operating earnings through a repositioned product portfolio focused on less capital-intensive, higher return accumulation and protection products[106]. - The company aims to enhance its brand and operational effectiveness to compete for AUM in a market favoring passive investment services[96]. - The company aims to enhance advisor productivity through state-of-the-art technology and a proprietary Life Planning training curriculum[139].