ebridge Financial(US:CRBG)2023-05-13 06:30Financial Data and Key Metrics Changes - The company reported earnings per share of $0.97, with an adjusted return on average equity of 10.8% and adjusted pre-tax operating income of $724 million [58][106] - Base spread income grew by 38% year-over-year, driven by higher new money rates and growth in spread-based products [66] - Total premiums and deposits reached $10.3 billion, up 45% compared to the prior year [66] Business Line Data and Key Metrics Changes - Individual Retirement reported adjusted pre-tax operating income of $534 million, a 14% increase year-over-year, with base spread income rising by 49% [78] - Group Retirement's adjusted pre-tax operating income decreased by 23% year-over-year, but increased by 7% when excluding variable investment income [79] - Life Insurance reported adjusted pre-tax operating income of $82 million, a decrease of 2% year-over-year [113] Market Data and Key Metrics Changes - The company executed approximately $3 billion in new investments in the first quarter, with an average gross yield of 6.5% [60] - The commercial mortgage loan portfolio was valued at $7.7 billion, representing 4% of total invested assets [2] - The traditional U.S. office portfolio component was $4.5 billion, approximately 2% of total invested assets [148] Company Strategy and Development Direction - The company is focused on operational separation from AIG, with significant progress made in establishing capabilities as a standalone entity [68] - A strategic review is underway to evaluate alternatives for the health insurance business in Ireland, aiming to streamline the portfolio [61] - The company continues to emphasize risk management and has derisked its portfolio over the years, particularly reducing exposure to office properties [62][88] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to weather market dislocations and capture new opportunities [70] - The outlook for Pension Risk Transfer (PRT) sales remains strong, with a robust pipeline in both the U.S. and UK [129] - Management noted that surrender rates are within expectations, reflecting market conditions and crediting rates [127] Other Important Information - The company has returned approximately $450 million in dividends to shareholders since its IPO, with a fourth consecutive quarterly dividend of $0.23 per share announced [65][117] - The company has a high-quality investment portfolio, with 94% of fixed income investments rated investment grade [1][100] Q&A Session Summary Question: What is the pace of the buyback plan? - Management indicated that the buyback program reflects confidence in the financial position and is not time-limited, with plans to complement the dividend program [8][95] Question: How are surrender rates trending? - Surrender rates increased but were within expectations based on crediting rates, with management noting that new business sales also reflect these conditions [127][154] Question: What is the outlook for the PRT market? - Management sees a strong pipeline for PRT transactions, particularly in the U.S. and UK, with larger full plan terminations expected [129] Question: How does the company approach risk management? - The company employs a disciplined risk management framework, focusing on both sides of the balance sheet and conducting regular stress tests [99][150]