Equitable Holdings' Q2 2025: Navigating Key Contradictions on RILA Spreads, Capital Strategy, and Earnings Growth

RILA spread sensitivity to interest rates, capital management strategies, earnings growth expectations, and AllianceBernstein ownership strategy are the key contradictions discussed in Equitable Holdings' latest 2025Q2 earnings call.



Retirement Assets and Inflows:
- Equitable Holdings reported assets under management and administration at quarter-end totaled $1.1 trillion, up 5% year-to-date.
- The retirement segment produced $1.9 billion of net inflows in Q2, with significant contributions from wireless sales and BlackRock, LifePath, Paycheck products.
- Growth was driven by strong sales through Equitable Advisors and strategic partnerships with companies like BlackRock.

Equity Market Impact and Mortality Claims:
- Non-GAAP operating earnings decreased to $352 million or $1.10 per share, down 23% year-over-year, primarily due to elevated individual life mortality claims.
- Fee-based earnings were pressured by lower average equity market levels, which affected separate account balances.
- The company's mortality exposure was reduced by 75% through reinsurance, expected to improve earnings stability.

Asset Management Performance:
- AllianceBernstein reported net outflows of $6.7 billion in Q2, with $4.8 billion in active outflows, predominantly in April.
- The private markets business grew, with AUM up 20% year-over-year to $77 billion, reflecting increased institutional interest.
- The outflows and market conditions impacted AB's performance, yet institutional pipeline and private markets growth prospects remain strong.

Capital Management and Shareholder Returns:
- Equitable Holdings returned $318 million to shareholders, representing a 74% payout ratio above the target range.
- The company plans to execute $500 million of incremental share repurchases and repay debt in the second half of 2025.
- The Individual Life reinsurance transaction with RGA freed over $2 billion of capital, enhancing financial flexibility and supporting shareholder returns.