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Brighthouse Still Sees Fixed Annuities as Core Products: Earnings

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What You Need to Know

  • Brighthouse’s net results include big derivatives value swings.
  • Overall individual annuity sales were up.
  • The company sees non-variable indexed annuities as core.

Executives from Brighthouse Financial Inc. talked a little bit about their annuity priorities during a recent conference call with securities analysts.

Myles Lambert, the Charlotte, North Carolina-based company’s chief distribution and marketing officer, said the company sees its Shield, Flex and SmartCare products as core.

The Shield contracts are registered index-linked annuity contracts.

The Flex contracts are variable annuity contracts, and the SmartCare are life insurance products that include access to long-term care benefits.

Conor Murphy, the chief operating officer, said Brighthouse also sees non-variable indexed annuities as being core.

For the rest of this year, “our expectations are that we will grow sales in our core products,” Lambert said. “We do expect a decline in fixed deferred rate annuities. But at this juncture, we feel like the growth in our core product sales should be able to offset the decline that we should see with fix rate deferred annuities.”

Brighthouse Financial (BHF)

Brighthouse Financial is reporting a $583 million net loss for the first quarter on $938 million in revenue, compared with $5 billion in net income on $9 billion in revenue after mark-to-market adjustments for the first quarter of 2020.

The Charlotte, North Carolina-based life insurer a drop in the value of the derivatives used to hedge its products deducted $1.5 billion from net results in the first quarter. Derivatives produced a $6.9 billion gain for the company in the year-earlier quarter.

Pretax adjusted earnings increased to $490 million, from $253 million.

Sales of individual annuities increased to $2.1 billion in the latest quarter, from $2 billion in the year-earlier quarter.

Sales of life insurance increased to $23 million, from $16 million

Fidelity National Financial (FNF)

Fidelity National Financial is a property and casualty insurer with a large annuity business.

The Jacksonville, Florida-based carrier is reporting $604 million in net income for the first quarter on $2.7 billion in revenue, compared with a $57 million net loss on $1.6 billion in revenue for the first quarter of 2020.

The company completed the acquisition of FGL Holdings, the parent of Fidelity & Guaranty Life, in June 2020. F&G is reporting $284 million in net income for the latest quarter on $539 million in revenue.

F&G recorded a total of $1.6 billion in annuity sales in the first quarter, including $1 billion in non-variable indexed annuities, $467 million in fixed-rate annuities; and $125 million institutional spread-based products.

Entrance into the bank and independent broker-dealer channels helped boost sales of multi-year guaranteeing annuity (MYGA) contracts, FNF said.

National Western Life Group (NWLI)

National Western Life is reporting $62 million in net income for the first quarter on $230 million in revenue, compared with a $2.1 million net loss on $52 million in revenue for the first quarter of 2020.

The Austin, Texas-based company said overall annuity sales were 64% higher than in the year-earlier quarter, and that life insurance sales for the quarter were up 8%.

The company identified about $7 million in life insurance claims caused by situations in which COVID-19 was the primary cause of an insured’s death.

(Image: Diego M. Radzinschi/ALM)