Annuity Issuer F&G Set to Go Public Dec. 1
The CEO says consumers seem to be happier with their annuities than with their ETFs.
A midsize annuity issuer — F&G Annuities & Life — could get its own listing on the New York Stock exchange Dec. 1.
Fidelity National Financial, the publicly traded, Jacksonville, Florida-based title insurer that now owns F&G, announced Thursday that it will give F&G a separate identity by distributing 15% of F&G’s stock to investors who own Fidelity National stock on Nov. 22.
Fidelity National will keep an 85% stake in F&G.
F&G shares will trade under the stock symbol “FG.”
What It Means
F&G executives may soon have an easier time getting the attention of securities analysts, business news organizations and your clients.
The History
Fidelity National acquired F&G in June 2020. Company executives have said that they are happy with F&G’s performance but would like to see F&G’s success getting more attention from investors.
The Earnings
Fidelity National has been talking about the partial F&G spinoff since April.
The company announced the executive dates for the F&G stock distribution earlier this week, after posting F&G’s earnings for the third quarter, which ended Sept. 30.
F&G reported $115 million in net earnings on continuing operations for the quarter on $902 million in revenue, compared with $373 million in net earnings on $927 million in revenue for the year-earlier quarter. Several competitors posted losses for the quarter.
Sales of two types of fixed annuities — multi-year guaranteed annuities and non-variable indexed annuities — increased to $2.2 billion, from $1.5 billion.
Indexed universal life sales increased to $36 million, from $24 million.
Chris Blunt’s Assessment
Chris Blunt, F&G’s CEO, said during Fidelity National’s quarterly analyst call that product retail application flow is up 60%.
“In addition to increased demand from rising interest rates, our retail sales volume reflects expanding relationships with new and existing distribution partners in the agent, bank and broker-dealer channels,” he said. “Momentum, if anything, is accelerating.”
Although rates are rising, Blunt sees no investor rush to replace lower-rate annuities with higher-rate annuities.
Retail investors “are not generally sitting around looking for interest rate arbitrage,” he said. “They kind of wish they had more fixed annuities and fewer ETFs, frankly.”
Chris Blunt (Photo: American College)