Why did BHFAM's Q4 2024 earnings surprise analysts positively?

Brighthouse Financial Inc. (BHFAM) reported fourth-quarter net income of $671 million, which was a significant positive surprise compared to the same period a year earlier, when the company reported a loss. This positive surprise can be attributed to several key factors: 1. **Higher Premiums and Net Investment Income**: The company reported higher premiums and net investment income, which contributed to the improved financial results. Annuity sales increased by 3% to $2.9 billion, driven by strong sales of the Shield Level Annuity and higher fixed indexed annuity sales. This growth in premiums is a positive indicator, reflecting increased demand for the company's products. 2. **Effective Cost Management**: Total expenses were $688 million, which was a significant decrease from the previous year's $1.176 billion. This reduction in expenses, particularly in corporate expenses, reflects effective cost management and operational efficiency improvements. 3. **Strong Investment Performance**: The company reported an adjusted net investment income of $1.3 billion, which was a 15.5% increase year-over-year. This strong investment performance, driven by alternative investment income and higher interest rates, contributed to the overall financial success of the quarter. 4. **Improved Underwriting Performance**: The company's underwriting performance improved, with an adjusted operating income of $313 million from annuities, reflecting higher underwriting margins. This improvement in underwriting results is a positive sign, indicating better risk management and pricing strategies. In summary, BHFAM's Q4 2024 earnings exceeded expectations due to higher premiums, net investment income, effective cost management, strong investment performance, and improved underwriting performance. These factors combined to deliver a robust financial performance that surpassed analysts' expectations.