Corebridge Still Bullish on Fixed Annuity Sales
CEO Kevin Hogan reported that surrenders have been within expectations.
Executives at Corebridge Financial say they’re optimistic about sales of fixed annuities and non-variable indexed annuities.
The Houston-based company increased the amount of premiums and deposits flowing into non-variable indexed annuities to $1.9 billion in the fourth quarter of 2023, from $1.75 billion in the fourth quarter of 2022.
The flow of premiums and deposits into traditional fixed annuities soared to $3 billion, from $1.4 billion.
Kevin Hogan, the CEO of Corebridge, told securities analysts during a recent conference call that the interest rate environment is positive for fixed annuity sales.
“And I think that the fixed income asset class is something that people have really woken up to as part of a long-term savings plan,” Hogan said.
What it means: Some annuity issuers are highlighting their sales of variable annuities, including registered index-linked annuities.
Corebridge is taking a different path and continuing to focus on fixed product sales.
The earnings: Corebridge held the call to go over results for the fourth quarter.
The company reported a $1.3 billion loss for the quarter on $3.3 billion in revenue, compared with a $168 million net loss on $4.1 billion in revenue for the fourth quarter of 2022.
Adjusted after-tax operating income, which excludes the effects of changes in the estimated value of derivatives, investments and benefits promises, increased to $661 million, from $610 million.
Variable annuity premiums and deposits fell to $350 million, from $652 million.
Group retirement: Hogan noted that about $42 billion of the $122 billion of assets at the Corebridge group retirement business are at the “out-of-plan” business.
Many plan members end up buying fixed annuities and indexed annuities outside their employers’ retirement plans.
Elias Habayeb, the Corebridge chief financial officer, said the plans are naturally seeing asset outflows as older workers retire. Those plan participants tend to have higher guaranteed minimum interest rates, Habayeb said.
At the group retirement plans, “our net inflows are dominated by our younger-age cohorts, with lower guaranteed minimum interest rates,” he said.
Corebridge CEO Kevin Hogan. Credit: Corebridge