F&G Swings to Loss as Adjusted Earnings Slide
Gross sales fell 14% from the prior quarter to $2.72 billion.
F&G Annuities & Life (FG), an annuity and life insurer, swung to a second-quarter net loss attributable to common shareholders of $81 million, or $0.62 a share, as mark-to-market effects weighed on results.
The loss marked a reversal from earnings of $244 million, or $1.78 a share, in the first quarter and $35 million, or $0.26 a share, a year earlier. The latest period included $144 million of unfavorable mark-to-market effects.
Total revenue rose 4% from a year earlier to $1.42 billion. Life-insurance premiums and other fees fell 35% to $394 million, while recognized net gains increased to $290 million from $51 million and interest and investment income rose 5% to $718 million.
Adjusted earnings declined for a second consecutive quarter, falling to $85 million from $110 million in the first quarter and $123 million in the fourth quarter of 2024. Adjusted earnings were down 17% from a year earlier, while adjusted earnings per share fell sequentially to $0.65 from $0.82.
Lower alternative-investment income contributed to the pressure. It declined to $49 million, or $0.38 a share, from $67 million, or $0.50 a share, a year earlier, with returns in both periods below management's long-term expectation. Adjusted return on assets narrowed to 68 basis points from 76 basis points in the first quarter and 87 basis points in the fourth quarter.
Core sales held near $2.0 billion sequentially, supported by $1.74 billion of indexed-annuity sales. Opportunistic sales fell to $701 million from about $1.2 billion as funding agreements and multiyear guaranteed annuities moderated. Net sales dropped 35% from the first quarter to $1.46 billion, reflecting $1.26 billion of sales ceded through flow reinsurance.
Assets under management before reinsurance reached a record $74.7 billion, up 8% from a year earlier but only about 0.3% from March 31. Retained assets declined sequentially to $55.9 billion from $56.4 billion as flow reinsurance and a funding-agreement note maturity offset new-business flows.
F&G returned $128 million to shareholders, nearly twice the first quarter's amount, as share repurchases rose to $91 million and dividends held near $37 million. Book value excluding accumulated other comprehensive income slipped to $45.93 a share from $46.51 at March 31, leaving capital returns higher even as adjusted profitability and retained assets receded.