Corebridge Financial, one of the largest providers of retirement solutions and insurance products in the US, has reported a net loss of $0.6bn in its Q4 2022 results, a 118% decrease compared to the prior year quarter.
According to the company, the change was largely driven by $3.0bn of gains recorded in the fourth quarter of 2021 attributed to the sale of its affordable housing portfolio and $1.2bn of net realised losses in Q4 of 2022 related to derivatives and foreign exchange movements.
Adjusted pre-tax operating income was $639m ($574m after-tax), a 31% decrease compared to the prior year quarter.
This was largely due to challenging macroeconomic conditions and structural changes in Corebridge’s business profile, including implementation of the company’s new capital structure and divestitures.
Premiums and deposits were $8.7bn, a 2% increase compared to the same period last year, which was $8.5bn.
Excluding transactional activity (i.e., pension risk transfer, guaranteed investment contracts and Group Retirement plan acquisitions), premiums and deposits grew 14% when compared to Q4 2021.
These results, Corebridge Financial noted, mainly reflect higher fixed and fixed index annuity deposits partially offset by lower variable annuity deposits in Individual Retirement and Group Retirement.
Net investment income was $2.6bn, a 13% decrease compared to Q4 2021, while net investment income on an APTOI basis was $2.3bn, a 7% decrease compared to the prior year quarter.
This decline largely was due to lower variable investment income – notably weaker private equity returns, lower bond call and tender income, and lower commercial mortgage loan prepayment activity – partially offset by higher base portfolio income. Base portfolio income grew 19% when compared to the fourth quarter of 2021.
“2022 was a year of significant milestones for our company,” said Kevin Hogan, President and CEO of Corebridge. “We rebranded as Corebridge Financial early in the year as our operational separation from AIG began, and in September, we became a New York Stock Exchange listed company when our initial public offering closed on September 19.
“We ended the year with strong momentum and remain focused on our core mission of helping individuals plan, save for and achieve secure financial futures.”
He added: “In the fourth quarter and throughout the year, our diversified business platform and broad reach enabled robust sales and attractive margins in fixed and fixed index annuities, in addition to strong performance realised across all our businesses.
“We achieved meaningful growth in base spread income and substantial improvement in underwriting margin, and we benefited from strong deposit flows. We have made progress with Corebridge Forward, our modernization initiative, and are benefiting from our partnerships with Blackstone and BlackRock. We maintained a strong financial position throughout the year and delivered on our capital management goals for 2022.”
Looking ahead, the external environment remains uncertain, Hogan noted, but Corebridge Financial is “steadfastly focused” on executing its strategies and delivering on its financial goals, he highlighted.
Adding: “We have a strong balance sheet and free cash flow profile, and we will stay disciplined in deploying capital to create value for our customers, distribution partners and other stakeholders.”
