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February 14, 2022 at 04:15 PM
What You Need to Know
- Ed Spehar of Brighthouse had kind words for inflation.
- Equitable executives said they deployed annuity buyouts in 2011 and now focus more on reinsurance as a vehicle for de-risking.
- CNO is hungry for new agents.
Brighthouse Financial executives can live with the idea of a moderate increase in inflation.
A securities analyst asked them about inflation Friday, on a conference call the Charlotte, North Carolina-based company held to go over earnings for the fourth quarter of 2021 with securities analysts
Eric Steigerwalt, the CEO, emphasized that the company will be careful about trying to hold its administrative expenses down.
Ed Spehar, the chief financial officer, emphasized that moderate inflation could help Brighthouse by improving investment returns.
Brighthouse, like other U.S. life insurers, uses big portfolios of high-grade corporate bonds to support its life insurance and annuity obligations. Rates on those bonds have been below 5% for most of the past five years.
Spehar observed that inflation often leads to higher interest rates.
Because of that, “inflation is an overall good guy for us,” Spehar said. “Higher interest rates, higher inflation is not something that we are afraid of.”
Spehar said rates started to rise a bit in the fourth quarter.
“Clearly, we are happy that rates are higher,” he said.
The Earnings
Brighthouse is reporting $64 million in net income for the fourth quarter of 2021 on $2 billion in revenue, compared with a net loss of $1 billion on $131 million in revenue for the fourth quarter of 2020.
