American multinational financial services company, Corebridge Financial has announced its first quarter of 2024 financial results, reporting a net income of $878 million compared to a net loss of $459 million in the prior year quarter.
According to the announcement, the change was mainly driven by realised losses in the first quarter of 2023 for the Fortitude Re funds withheld embedded derivative and higher net investment income in Q1 2024.
Corebridge also reported an adjusted pre-tax operating income (APTOI) of $837 million, a 16% increase over the prior year quarter.
The firm noted that, excluding variable investment income, APTOI grew 20% over the same period, primarily the result of higher base spread income, higher fee income and lower expenses, partially offset by lower underwriting margin driven by the sale of Laya Healthcare and one-time reinsurance-related items in the Life Insurance segment.
Premiums and deposits were $10.6 billion, a 2% increase over the prior year quarter. Excluding transactional activity (i.e., pension risk transfer, guaranteed investment contracts and Group Retirement plan acquisitions), premiums and deposits grew 3% over the same period primarily driven by growth in the firm’s spread-based products.
Net investment income in Q1 2024 increased 8%, to $2.9 billion, and net investment income on an APTOI basis was $2.6 billion, a 13% increase over the same period the year prior.
This improvement was due to higher base portfolio income, which grew $396 million, or 18%, over the prior year quarter. This increase was partially offset by variable investment income, which declined $26 million, or 93%, over the same period.
Kevin Hogan, President and Chief Executive Officer of Corebridge, said: “Corebridge had a very strong start to 2024 with operating earnings per share increasing 13% year over year to $1.10. These results demonstrate how our diversified business model delivers multiple sources of income leading to consistent cash flow generation and attractive shareholder returns.
“We grew our earnings by pursuing profitable organic growth with focused execution, and leveraging our broad product suite and distribution platform to help meet the needs of an aging U.S. population. We see a growing generation of advisors who are becoming more aware of the value of annuities in helping their clients prepare for retirement.
“This, together with the larger macroeconomic environment, helped Corebridge deliver $10.6 billion of premiums and deposits this quarter and $50 billion over the last five quarters, at attractive margins. At the same time, through overall expense discipline and the implementation of our modernization program Corebridge Forward, we reduced general operating expenses by 10% year over year.”
For this year’s first quarter, Corebridge also reported that premiums and deposits of its Individual Retirement business were consistent with the prior year quarter due to higher fixed annuity deposits offset by lower fixed index and variable annuity deposits.
The firm’s Group Retirement premiums and deposits decreased 9%, to $2,054 million, due to lower plan acquisitions and out-of-plan variable annuity deposits, partially offset by higher in-plan deposits along with higher out-of-plan fixed annuity and fixed index annuity deposits.
Its Life Insurance business saw a slight growth, to $1,094 million from $1,049 million in Q1 2023. Additionally, the business’ underwriting margin, excluding variable investment income, decreased 16% from the prior year quarter primarily due to the 2023 sale of Laya Healthcare and one-time reinsurance-related items.
The sale of Corebridge’s UK life insurance business to Aviva plc, which closed on April 8, 2024, resulted in net proceeds of $550 million, the firm noted.
Hogan added: “This week, our Board of Directors approved an increase of $2 billion to our existing share repurchase program, reflecting their ongoing confidence in our financial position and strategic direction.
“Our strong balance sheet is the result of a long-term commitment to measured growth, prudent risk management and disciplined asset and liability management. Looking ahead, we will continue to move with pace and purpose to grow the business, serve our customers and create long-term value for shareholders.”
