F&G Annuities & Life's Q2 2025: Navigating Key Contradictions in Market Volatility and Strategic Focus

RBC sensitivity and equity market volatility, MYGA sales and demand, capital allocation and strategic focus, ROA expectations and performance, owned distribution strategy are the key contradictions discussed in F&G Annuities & Life, Inc.'s latest 2025Q2 earnings call



Record AUM and Sales Growth:
- F&G Annuities & Life, Inc. reported record AUM before flow reinsurance of $69.2 billion at the end of the second quarter, including retained assets under management of $55.6 billion.
- The company delivered one of its best sales quarters in history with $4.1 billion of gross sales, highlighting significant growth in core sales of fixed index annuities, index life, and pension risk transfer.
- The growth was driven by favorable macroeconomic conditions, continued consumer demand, and demographic trends.

Impact of Reinsurance Sidecar:
- The launch of a new reinsurance vehicle in partnership with Blackstone Managed Funds, expected to provide long-term on-demand capital of $1 billion, aims to support growth and enhance the company's fee-based business model.
- This initiative is anticipated to contribute to a higher ROE over time by augmenting existing flow reinsurance agreements and reducing capital intensity.

Dividend Resumption and Capital Allocation:
- F&G resumed its dividend in the second quarter after pausing for investments, indicating a favorable financial position and confidence in future cash flows.
- The company is committed to making smart capital allocation decisions, with owned distribution and reinsurance opportunities being areas of strategic focus.

Dividend Growth and Shareholder Value:
- F&G's owned distribution portfolio is performing well, having invested nearly $700 million, with a focus on diversified products and markets, reflecting growing businesses and strong leadership.
- This investment strategy is expected to generate significant value and contribute to long-term shareholder value.