Corebridge (CRBG) Q4 Earnings Top on Higher Premiums & Deposits
Corebridge Financial, Inc. CRBG reported fourth-quarter 2023 adjusted operating earnings per share of $1.04, which outpaced the Zacks Consensus Estimate by 5.1%. The bottom line improved 12% year over year.
Adjusted revenues amounted to $5.9 billion, which advanced 11.3% year over year.
The quarterly results benefited on the back of strong premiums and deposits growth across the Individual Retirement and Institutional Markets segments. Improved sales in the CRBG’s spread-based product portfolio and higher net investment income also contributed to the upside. However, reduced underwriting margins, and an elevated benefits and expense level partly offset the upside.
Corebridge Financial, Inc. Price, Consensus and EPS Surprise
Corebridge Financial, Inc. price-consensus-eps-surprise-chart | Corebridge Financial, Inc. Quote
Quarterly Operational Update
Premiums and deposits rose 20% year over year to $10.5 billion in the fourth quarter. Premiums and deposits, excluding transactional activity, climbed 21% year over year resulting from increase in fixed annuity and fixed index annuity deposits.
Corebridge’s net investment income of $3 billion grew 18% year over year on the back of growth in base portfolio income.
Total benefits and expenses escalated 11.9% year over year to $5.1 billion due to an increase in policyholder benefits and interest credited to policyholder account balances.
CRBG reported an adjusted pre-tax operating income of $820 million in the quarter under review, which improved 16% year over year.
Adjusted return on average equity improved 80 basis points (bps) year over year to 11.2%.
Segmental Performance
Individual Retirement
Premiums and deposits climbed 38% year over year to $5.3 billion in the fourth quarter, attributable to higher fixed annuity and fixed index annuity deposits. Fee income was $288 million, up 1.8% year over year.
Spread income of $715 million improved 24.6% year over year. The unit’s adjusted pre-tax operating income rose 35% year over year to $628 million on the back of growing base spread income and lower expenses.
Group Retirement
The segment recorded premiums and deposits of $2.1 billion, which fell 7% year over in the quarter under review due to a decline in plan acquisitions and out-of-plan variable annuity deposits. Fee income advanced 7.1% year over year to $181 million.
Spread income of $193 million tumbled 8.1% year over year. Adjusted pre-tax operating income was $179 million, which grew 4% year over year resulting from improved fee income and declining expenses.
Life Insurance
Premiums and deposits increased 2.8% year over year to $1.1 billion in the unit. The segment reported an adjusted pre-tax operating income of $79 million in the fourth quarter, which plunged 44% year over year due to an elevated frequency of smaller claims, leading to an unfavorable Universal Life mortality experience.
Institutional Markets
The unit’s premiums and deposits of $2 billion climbed 29% year over year in the quarter under review, thanks to an increase in pension risk transfer transactions. Fee income remained flat year over year at $16 million.
Spread income soared 68.6% year over year to $86 million. Adjusted pre-tax operating income rose 55% year over year to $93 million on the back of improved base spread income.
Corporate and Other
The unit incurred an adjusted pre-tax operating loss of $159 million in the fourth quarter, wider than the year-ago quarter’s loss of $135 million. The results suffered a blow due to non-recurring gains on the sale of legacy investments.
Financial Position (as of Dec 31, 2023)
Corebridge exited the fourth quarter with a cash balance of $612 million, which grew 10.9% from the 2022-end level. Total investments of $232.6 billion increased 5.7% from the figure at 2022 end.
Total assets of $379.3 billion increased 5.3% from the 2022-end figure.
Long-term debt amounted to $9.1 billion, up 15.9% from the figure as of Dec 31, 2022. Short-term debt totaled $250 million at the fourth-quarter end.
Total equity of $12.6 billion advanced 22.4% from the 2022-end level.
Adjusted book value per share was $36.82 as of Dec 31, 2023, which increased 1.3% year over year.
Share Repurchase & Dividend Update
Corebridge bought back 11.8 million common shares worth $252 million in the fourth quarter. It also paid out quarterly dividends of $145 million and special dividends of $731 million.
Full-Year Update
Corebridge’s adjusted operating earnings per share of $4.10 advanced 12% year over year in 2023. Adjusted revenues rose 18.1% year over year to $21.2 billion.
Premiums and deposits amounted to $39.9 billion, which climbed 26% year over year. Net investment income improved 16% year over year to $11.1 billion in 2023.
CRBG reported an adjusted pre-tax operating income of $3.2 billion, up 12% year over year. Premiums and deposits in the Individual Retirement, Group Retirement and Life Insurance segments grew 20.2%, 1.8% and 1.5%, respectively, on a year-over-year basis. The metric in the Institutional Markets unit more than doubled year over year.
Key Financial Targets
CRBG aims to achieve a return on average equity in the range of 12-14%. Also, it targets to pay average annual stockholder dividends of $600 million and maintain a payout ratio of 60-65%.
Zacks Rank
Corebridge currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Insurers
Of the insurance industry players that have reported fourth-quarter 2023 results so far, the bottom-line results of Cincinnati Financial Corporation CINF, The Allstate Corporation ALL and American International Group, Inc. AIG beat the respective Zacks Consensus Estimate.
Cincinnati Financial reported fourth-quarter 2023 operating income of $2.28 per share, which surpassed the Zacks Consensus Estimate by 18.1%. The bottom line surged 79.5% year over year. Total operating revenues in the quarter under review were $2.3 billion, which improved 10.8% year over year. Also, the top line beat the consensus mark by 1%.
Earned premiums climbed 10% year over year to $2.1 billion. Investment income, net of expenses, increased 15% year over year to $239 million. In its property & casualty insurance business, CINF witnessed an underwriting income of $252 million compared with an underwriting income of $93 million in the year-ago period. The combined ratio improved 740 bps year over year to 87.5.
Allstate’s fourth-quarter 2023 adjusted net income of $5.82 per share surpassed the Zacks Consensus Estimate by 50.4%. The company reported a loss of $1.33 per share in the year-ago quarter. Operating revenues of $14.9 billion rose 10% year over year in the quarter under review. Yet, the top line fell short of the consensus mark by a whisker.
Net investment income improved 8.4% year over year to $604 million in the fourth quarter. ALL generated a pretax income of $1.8 billion in the quarter under review against the year-ago quarter’s pretax loss of $410 million. Total policies in force were 192.8 million as of Dec 31, 2023, up 2% year over year. The Property-Liability segment recorded premiums earned of $12.6 billion, which advanced 10.7% year over year
AIG reported fourth-quarter 2023 adjusted earnings per share of $1.79, which outpaced the Zacks Consensus Estimate by 12.6%. The bottom line jumped 31.6% year over year. Operating revenues inched up 4.6% year over year to $12.7 billion in the quarter under review. The top line beat the consensus mark by 9.7%. Premiums fell 9.9% year over year to $8.5 billion in the fourth quarter.
Total net investment income of $3.9 billion climbed 20.7% year over year. Net premiums written in the General Insurance segment amounted to $5.8 billion in the fourth quarter, which grew 2.6% year over year. Underwriting income increased 1.1% year over year to $642 million in the quarter under review. The unit’s combined ratio of 89.1% improved 80 bps year over year due to an improvement in the loss ratio.
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