F&G signals shift toward 25% fee-based earnings by 2028 while expanding AUM and capital flexibility
View original at seekingalpha.comF&G signals shift toward 25% fee-based earnings by 2028 while expanding AUM and capital flexibility Earnings Call Insights: F&G Annuities & Life, Inc…
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FNF distribution strengthens F&G's positioning within equity markets and facilitates greater institutional ownership
80% confidenceF&G feels comfortable and confident in the credit soundness of the investment portfolio
80% confidenceStarting Q1 2026, F&G is updating long-term expected return for alternative investments to reflect only 40% or $4 billion of equity interest, with no impact to adjusted net earnings on an as-reported basis
80% confidenceF&G plans for continued mediocre returns as the prudent approach
80% confidenceF&G has a blended return of approximately 10% on current basis, with quarterly return in the 7% to 7.5% range
80% confidenceOperating expense ratio expected to improve to approximately 45 basis points by year-end 2027 for a cumulative 15 basis points or 25% improvement over the 3-year period
80% confidenceThe Ancient Financial Holdings transaction offers counterparty diversification for MYGA flow reinsurance in the future
80% confidenceF&G is trading at $0.62 of book value and the stock is trading as though there are billions of credit losses coming
80% confidenceFee-based earnings are expected to reach approximately 25% of total earnings by year-end 2028
80% confidence$200 million of the $300 million proceeds have already been included in RBC number at year-end, with another $100 million to come for general uses including sales growth and AUM growth
80% confidenceF&G delivered a strong finish to an outstanding year through disciplined growth and proven business model flexibility, transitioning to be more fee-based, higher margin and less capital intensive
80% confidenceAnnuity terminations are a potential source of quarterly variability as F&G moves into 2026
80% confidenceIf surrenders come down when F&G has more assets, the company would rather have the assets even if it meant less expansion of ROA
80% confidenceSoftware exposure is less than 5% of the total portfolio, with less than 1% having disruption risk
80% confidenceF&G will continue to write MYGA but will be more selective about it due to significant fluctuation in demand
80% confidenceF&G expects to receive net proceeds of approximately $300 million from the sale of F&G Life Re Limited legal entity and runoff in-force block
80% confidenceF&G will pull fixed costs down a few percent to fund variable costs while continuing to grow without growing expenses
80% confidenceF&G feels very confident in what's in the investment portfolio
80% confidence
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