F&G Annuities & Life (FG) 7 Nov 24 2024 Q3 Earnings call transcript

F&G recently released their third quarter earnings report, showcasing a surge in sales and asset growth, underpinned by a robust demographic trend and strategic product offerings. The company's focus on expanding its retail distribution network, along with a well-diversified investment portfolio, has positioned F&G for continued growth in the near and medium term.

Strong Sales Performance

F&G reported a record $3.9 billion in gross sales for the third quarter, a 39% increase over the previous year. Retail sales from the agency bank and broker-dealer channels saw a staggering $3.5 billion in the third quarter, nearly doubling the prior year. This surge is attributed to favorable market conditions and strong demand for retirement savings products, as well as a demographic trend driven by Baby Boomers retiring at a rate of 10,000 per day.

Retirement Solutions and Demographics

F&G's strong sales performance in retirement solutions is a testament to the company's ability to capitalize on demographic trends. The company's focus on offering retirement savings products with relatively higher rates, tax deferred growth, and principal protection has proven effective in attracting consumers. With a significant portion of consumers holding over $6 trillion in cash parked in money market funds, F&G's offerings are poised to benefit from consumers' desire to lock in higher interest rates provided by annuities.

Product Diversification and Growth

F&G's strategic expansion into new markets, such as Retirement Income Longevity Annuities (RILA) and Pension Risk Transfer (PRT) sales, is a clear sign of the company's long-term growth plans. With a $3.8 trillion corporate pension plan market showing signs of maturity, F&G is positioning itself to compete in the $100 million to $1 billion deal size segment. This diversification strategy is expected to contribute to the company's future growth.

Financial Health and Capital Management

F&G's strong financial position is further underscored by its well-diversified investment portfolio, with 96% of fixed maturities being investment-grade. The company's asset allocation strategy remains stable, with a focus on matching assets to liabilities and optimizing portfolio performance. F&G's partnership with Blackstone provides flexibility to pivot between public and private assets, helping mitigate the impact of spread compression.

Conclusion

F&G's third quarter earnings call highlights a company in a strong financial position, capitalizing on favorable demographic trends and strategic product offerings. With a clear focus on expanding retail distribution, entering new markets, and maintaining a well-diversified investment portfolio, F&G is well-positioned for continued growth in the near and medium term. The company's strategic initiatives and financial health position it as a key player in the retirement solutions market, making it an attractive investment prospect for those seeking exposure to the sector.