EQH - Earnings call transcript Q4 2019 | Equitable Holdings, Inc.

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to Equitable Holdings Fourth Quarter 2019 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session [Operator Instructions].

I would now like to hand the conference over to your speaker today, Jessica Baehr, Head of Investor Relations. Thank you. madam. ahead, go Please

Jessica Baehr

morning, Quarter to for XXXX found atir.equitableholdings.com. can Good Year today's Holdings and be website our Fourth Earnings in and you. Equitable welcome Full call Thank Call. Materials

would we present rules we forward-looking and like Before regarding is I to that the today certain some to subject disclosure. note and regulations information of SEC begin,

expressed such forward-looking by results Our or in may materially differ indicated from those statements.

the So our safe to I'd out harbor of point Slide presentation. on language X like

safe harbor our in our You find can language XX-K. also

Joining is Chief me Malmstrom, Pearson, Executive Also John Mark Officer Financial Anders Officer. is on Chief today's and Weisenseel, on call Financial President AllianceBernstein's the line of and Equitable our Chief Officer. Holdings;

generally we this known and will of Reconciliations these may non-GAAP our website, measures also be of Investor presentation call, measures. our based on supplement. as release, definitions related portion that GAAP measures be directly During comparable on found slide most financial accounting the earnings to accepted and the non-GAAP financial principles, certain measures discussing are in not Relations

Mark now to the like turn for Anders call to prepared over would their I remarks. and

Mark Pearson

full we you, pleased joining our targets strategic on how morning, who against key and to performing good our are results. Thank today. priorities. quarter financial This and present provide morning all call XXXX fourth an update Jessica, to year our earning also and are We'll we are

brand share been some Equitable, delighted the an our Before since are has new turning highlights. returned of again Today, historic to in XXXX, results, name American once XXXX. business be update find to territory. like our to ourselves we and and iconic to exciting that to would I integral identity Entering recent having again we

succeed in As work, to hard a to we series thrive we listed company. our X, secondary economic as were interest will independent building capabilities at continue transactions and ensure an XXXX effectively to AXA's market reduced of

now today. own have comprised frameworks, diverse systems, accurately is policies, talented a and which to structures we leaders, body of and Equitable creating In our addition governance who reflects

pivotal brought in an array our Achieving reflected teams And today. their clients our are that sharing as strong was challenges, we for serving our while results a kept organization. on independence the moment focus of and proud firmly with I'm opportunities you this transaction

at billion business, delivered total, and looking by When XXXX we operating over strong across in of $XXX growth of inflows performance billion. $XX AUM the net driven

to in share robust $X.X Our flow continue shareholders enabled of and cash returning capital the dividends us year. the throughout billion tune to significant to repurchases

balance our by our announced intend we XXXX. strength to continue on with evidenced an continue million consistently target of amount to our payout accelerated consistency time. over buyback authorization confidence share quarterly to repurchase $XXX our $XXX the to XX% incremental to in the give into quarter, and to performance sheet that of delivering next remain our just ratio. return dividend, we Together which is us the increase we This to was And million well positioned capital shareholders program yesterday, ability XX%

under be to report economics, and this an accounting fully pleased with hedging we've business. the fully to which the while an we economic market-based, aligned flows better will at VA As NAIC reserves. our that that not how will reform framework, statutory statutory basis, reflected closer manage believe statutory I'm from We last in early discussion to successfully is And our be this quarter, moves framework, our update cash adopted year-end. program

$XXX this the to to and the and was of under our million year-end, minimum stock liquidity well XXX% sheet and reserving balance VAs XXX% capital old further to additional CTEXX the of excess translates rounding a new formula new approximately opportunistically during ratio of standards, in raised with fourth XXX% finally, optimizing company XXX%, RBC Under our flexibility new minimum And the and forward. RBC structure providing As story, target lines. in holding capital for our and preferred out XXX%. for going business we NAIC non-VA quarter, capitalization

strategic Slide financial a performance strong basis. and to momentum or of X, were capital XXXX. basis, per summary a driven a of execution business operating by was billion, in management year segments. now our of results the our program. continued excluding assets full sustained under growth Supporting $X.X Turning on growth our our On $X.XX impact notable non-GAAP across against items, earnings This each in priorities, and management share these significant was

XX% supported positive their by by positions we help net billion grew secure in continued supported Group channels. leading and our marked distribution we and year SCS the At their sales strength under leadership distribution of K-XX growth flows, our classes, teachers XX% In seventh and net throughout consecutive deepened buffered across geographies. broad-based grew $XXX worksite to by Retirement, relationships annuity as of assets to goals model Individual leverage maintained existing distribution the In the reflecting focused channels billion, financial our of markets, year-over-year, led our asset strong $XX management year over across market advice inflows, by XXXX position AllianceBernstein, the retirement. and achieve Retirement, we and by product where in and strength

can is markets across of our business strong scale company in focusing billion, months. $XXX total advantages, Solutions notable attractive and we as momentum on XX, where year management the earnings have we benefits capital the competitive in success And non-GAAP top XX on trailing get by employee December businesses, throughout drive these to and and nascent encouraging of under $XXX stood billion invested. ROE continue line business. Lastly, of our increase at we excluding assets generating On point, an this delivered items. return upside generated a XX.X%, operating Protection Overall,

for In conclusion, was Equitable strong another it Holdings. year

the to ability value our delivering commitments a over partners position enter create continue long clients, our in for and term. of to on are confidence communities, We and from XXXX and shareholders strength our

over the turn go to quarter call Anders? our now to in Anders results detail. fourth more through will I

Anders Malmstrom

consolidated Thank on management you, Slide before outlook. and Mark, for morning, our review fourth program will financial capital detail results our the everyone. I results, quarter segment more and good On providing X,

we result operating Driving separate AUM non-GAAP reported prior year higher earnings fee-type quarter. net higher investment significant increase up was revenue this the $XXX $XXX as of and as in from million, in growth. due quarter, million to This an account balances income well

end strategic this quarter's on to of priorities. our execution the XXXX. contributing $XX deliver of a year-end, million, on Also the to million target savings To run track our net was $XX achieved we've placing us result continued rate of by

quarter, execution results our And of X reflect rebalance the year we $XXX announced benefit ahead of last we've cumulative GA million as schedule. XXXX. the completed of through Additionally, this quarter's

favorable on Normalizing was quarter favorable and fourth items, operating the $X.XX notable million, the items pages. share. of this in will mortality non-GAAP earnings or provide $XX per release segment was in reserve additional I including quarter, segment. impacting Finally, for Solutions detail the our net earnings Protection million these $XXX

Moving a net for results. the to We GAAP quarter loss reported million. of $XXX

by we our and interest economic protect with movements significant declines, as balance a and sheet economic which current and to prior like and expectations. rate I'd As in expected with conditions. driven our in we this line our basis that and protect performed quarters, effectiveness. hedging noneconomic that reiterate from recent products light results, nonperformance continues To from point, impacts with performed further stay fully to our place, rate sheet rate with in interest again XX% under of market On have on framework, risk a duration equity balance our hedging result regular volatility, was matched, reprice hedges program to

to primarily was net X. related earnings impacting balances. general to income segment income quarter. higher revenue driven Individual on by higher Also the to $XX current million will investment higher Moving separate investment notable on on increased higher Retirement in million, I Operating of $XXX balances net account begin from million $XXX the account slides. results and items with fee-type Slide

throughout $XX of performance. XX% year up growth improved Supporting as Overall, offering. which prior our offset from sales our premiums by market as XX% our year-over-year, momentum SCS another relationships year sales, improved distributors. trailing to first quarter, current to Account we with deepen $XXX by partially quarter, values were over inflows existing million continue the the of record quarter with year-over-year. continue we by this was product block over driven the from pre-XXXX XX finally, flows positive our billion, outflows on consistent And grew months net drive

approximately income net to XX% $XXX quarter. billion growth in higher prior the of year-over-year gross separate $X.X increased We in million of and in fee-type driven seventh higher notable In flows. both and quarter, net account Retirement year to $XX from Turning by to the flows of premium calendar from the by by items benefited due reported $XXX million, versus improved balances. on the XX% first year quarter year-over-year, prior primarily operating year exempts premiums. premiums fourth including markets. investment total, Account values growth gross the also appreciation Results Net period, higher in $XX and Group improved straight corporate year tax market also million million positive to revenue in up due Slide related earnings X.

performance sixth stable X. fee the quarter rates. higher billion. by Now billion primarily and turning from positive straight and inflows AllianceBernstein led net to to prior Research Investment Operating AUM base the of quarter, $XXX were and inflows increased year on earnings higher by fairly on $X.X fees flows Slide in marked $XXX Management or million and XX% $X.X of active million driven of fees

organic reflecting alternative broad active net X.X% global full the equity year, were For and income, $XX.X translating strength growth platforms. billion, to across inflows and fixed

XXXX, of organic asset the billion classes $XX XXXX. active AB $XXX had in In X% consistent billion, full active highest its $X.X drove since across continued gross has million of of sales reached organic inflows inflows net results generate billion each institutional, equity Moreover, for XX channels. $XX billion to inflows translating than sales In more asset and growth. retail, to distribution funds net growth. drove level record XX% gross and year $X.X classes, during net across of AB

for adjusted XX.X%, AB's XXXX XXXX expenses. full the relocation and year onetime from Nashville margin fees down was due to performance operating Finally,

offering. Looking as the its execute on ahead, we strategic to scaling XX% particularly AB long of remain the is and the such margin continues that further Nashville term, achievable target relocation to initiatives confident as

Protection Slide $XX earnings Solutions operating we prior year from million, quarter. to on million in X, of the $XXX where reported Moving up

the which guidance. we results post prior notable quarter, favorable had items prior above As this quarters, with two

a written year sales primarily a X% renewal the From full ROC. growth operating in quarter, Specifically, in gross Normalizing operating non-GAAP these to reserve million, an year-over-year, a basis perspective, X.X% been would earnings for $XX increased release. notable and which approximately premiums. of on $XX is million included translates to items, favorable premiums approximately have driven mortality items primarily earnings operating related

Slide premiums repurchases. and to quarterly capital in increased position continued form now would year-over-year, highlight like business. dividends management In $X.X we I by benefits X% capital share annualized over outlined program on Further, and XX. driven growth billion our our the employee XXXX, returned in shareholders of to

fourth of well $XXX completed quarter, part program, into our included XXXX secondary of AXA to sell This November. the from of was XXXX, which returned program as During offering. million we prior in November XXXX as accelerated the million repurchases which as million, $XXX down our $XXX its management capital

of repurchase our operating million sustainable Board distributions entities. a share supported new from ahead, by Directors upstream our $XXX has Looking strong authorized program,

second per target intend We to delivering the these further and to the Board power addition, strength, increase XX% share demonstrate by payout In to XX% ratio. $X.XX Company's quarterly our payable subject continue on approval. in financial and believe we dividend $X.XX actions to us earnings quarter, our enable to

quarter, aligns economic to standards, have early last statutory an our reserves. believe in we with now adopted economics fully new we hedging reflects update As better the and discussion NAIC successfully which our

have new minimum we the a XXX%. of established RBC. new our under mentioned, ratio RBC new combined target XXX% capitalization Mark XXX% As of NAIC to year-end, And as approximately formula, was

term our raising provide our further ratio The in XX.X%. opportunistically $XXX We a our been we of and fourth to additional have capital capital ended finally, structure the debt-to-capital continue to And preferred quarter, forward. aim to we of stock. loan used million as will financial position the year flexibility going optimize proceeds retire enhance with

our provide Before call Slide I to XX. priorities Mark to his comments, on strategic update for like back financial turning and on closing targets would an the

to host know, you are therefore, XXXX. term Day set mid-year detail standards target going around and to As implemented And our financial in plan Investor be longer targets with more forward. FASB we improvement an strategy XXXX

XX% EPS mid-teens growing targeting existing For operating XX% ROE XX% margin forward expect XXXX, of generating AB. XX%, to you for a to should returning plan; operating earnings carry X% with plus shareholders, a and us to the to

As for RBC old XXX% VAs to and XXX% NAIC to our to and of a standards. translates capital new XXX% the XXX% non-VAs target reminder, under minimum for CTEXX reserving

As We and believe everything strength our confidence is and and stability the always, balance differentiator our culture business. economic sheet all us manage permits a the and protect Equitable, do decisions enhance at the and it key our provides shareholders. we how in for govern ability that core this for of risk of value to with we is

With back that, I will to closing turn remarks. the call for Mark

Mark Pearson

Thanks, Anders.

to Before few opening key I'd up a close by messages. like reiterating to questions,

generated and and across As company. you consistently our can was business, priorities. on another strategic see, strong performance We executing our remarkable XXXX year successfully while for growth the

share shareholders $X.X in of strength our of capital levels and As billion cash further the XXXX, a and by flows. supported result, robust dividends meaningful we balance repurchases are to in returning with sheet

Holdings time the on shareholder in ability commitments and the IPO, maintain continue shareholders. of at high to our value continues Equitable for conviction to our we articulated deliver Overall, generating

Looking historic to territory. new make ahead, we the I from as to look of again as progress strength operating will position we exciting Equitable. we find in a continue ourselves and forward are

questions. With like open that, for to I'd line the

Operator

Your Greenspan Wells Instructions] comes [Operator the Elyse Fargo. first line question of from from

Elyse Greenspan

And into transaction late if question. also bit thinking around closed had you repurchase? I a space. route more provide little want for on to year. heard announced a guys My last entered forward, a a little Late up amount insurance within you update of a blocks potentially to just just you guess Can kind a provide just transaction your of you capital about that we've you then first go you interest with can share block. the the year, thought that last small life might consider? within transactions a good if lot free incremental other might that's And And

Anders Malmstrom

announced for question. end the MLICA. I Look, transaction Yes, we think your good and about year morning, last USFL Thanks Elyse. of

I a have. we transaction think, businesses cleanup I that as see more that noncore for

I think improve segment they Protection Solutions think actually its are performance. they are off. small, I to helped But the they run

you should simplify as that going cleanup helps yes. the transaction to and us structure that So forward, see a really, then, and

about us kind shareholder any other But question you they're optimize look Your and our else, this us operational performance. small expect to continue the also to value. And we everything to helping of can at always do transaction. ways

Elyse Greenspan

question. Okay, great. second And then my

that and X% as is to you Or this core we about growth? about pointing to X% that's CAGR the XXXX, same? think bit So than you're have XX% X% the through is we of more kind to looking return XXXX? So to little should a that getting capital earnings incremental Or you growth right, XX% of expenses out? business for EPS pull think on, it XXXX, continued higher, about an of just been kind to kind drive more of the X% to guys just to

Anders Malmstrom

to maybe that. clarify Yes, just

the I is practice, translate had actually growth. market think earnings we when growth. to we we what IPO, came And now EPS out on

So you our a of strategy that forward. see continuation should going as

Elyse Greenspan

Okay you. thank

Operator

JPMorgan. Your of the from next question Jimmy comes with line Bhullar

Your line open. is

Jimmy Bhullar

a morning. good Hi, had of couple questions. I

First, just business. on retirement the

Your and if I last you they've than over the flows modest, sequentially assets. versus your But improved of past been look X% fairly few think year. less years,

in do And this you you an than can least market, higher bit a So little of peers little actually, outlook you'll idea done a many is XXX(k) a sustain? level Or your have that? feel get what I the is? better. Because your to just bit on wanted that at get

Mark Pearson

Mark it's Jimmy, morning, Pearson. Good

Individual new principally look business, is our which two through sources product, side, Retirement really, on up very you SCS and the made it's today going If flows of flows well. very, the at

core of outflows So -- quarter legacy on by old and $XXX business, GMxB on the those million, that's flows business. the new net in offset the on been

surprise very performance So about business. of Individual feel the us, not a to good Retirement sales the

sales record quarter fifth consecutive right, think I'm the I SCS side. of on

got an you the some to That's as the by help of you've ROE on offset legacy coming going outflows. business basis, in, know. So us new

other which $XXX nice of quarter. the the side, on our of positive in business, part retirement seventh earnings the year, is year flows, then million Group net And Retirement

top So overall, about good very and lines we're it. doing well on feel our

Jimmy Bhullar

And the you And teachers in in the seeing in inquiries? are any pressure teachers business -- market? and practices just do you market, changes fee any practices expect -- the regulatory the given

Mark Pearson

Look, teachers Yes. we proud we're very where of the are on market.

teachers one as make have sweep off on than have yes, be us are U.S. the number million #X of we the doing the We educators obviously, would And that. X been regulators. player, included in that by K-XX would practices. contacted a And more the market. They we in

security, the our us In great are analysts signs the would we the situation. advise business course, of very retirement side for there a supplementary of need retirement there. collect have teams and as to complex them in rewarding the hitting fee investment understand point teachers product well really to pressure, the no, the terms allocation. on benefit give. schemes. we through our out I They no fees come But And that asset defined social advice in as, The

pressure product mean service we the is asset in and give. the month paying very service advice, terms for fees, of $XX feel a to the that about the average allocation give. no $XX So I we we and teacher the good the on

Operator

Your Krueger next Ryan from from question of KBW. comes the line

Ryan Krueger

as that conclude may as on? you review give an investing us thinking AllianceBernstein You well you you what the of strategic you Can had a on update indicated previously when your are stake. to disclose

Anders Malmstrom

Good Ryan. morning,

ownership the part feel very is I we about the the history. group. of comfortable percentage the I AB having that, as said as of And think ownership. AllianceBernstein before, is you your we Having question talked think by told we particularly I think before, XX%

standpoint. and a later flow we there should come year this comfortable I back were the if evaluating will cash feel is if in is this we something we we keep, very think something still But we change, should you. to from

Ryan Krueger

I on something worked Or and but actually function mean ratio the the then cushion I to we target? that of cash about guess sub, consider just a the target, that think to this of should should as it a the XXX% of, of CTEXX expect to really XXX% you XXX% the you're flow kind And ongoing above RBC is be more looking RBC just drawdown? toward to relative the we of come for may out managing not down target to

Anders Malmstrom

Yes. one to managed economic the our shareholders. very That's Look, sure make very I important. think overall, we company thing to model duties that's confident. policyholders to and we we And basically our pay to why to are available related here total that feel

pay For out making minimum laid sure to able are a the and entity target, from to the XXX% are as that, XXX% that to the up the annual company. actually we really we solvent entity, out insurance target, the holding operating above dividend well RBC the

question, So I think to target. minimum answer is this a your

the You minimum. never at to want be

to pay pay way. sustainable to So cushion the in it you and a have out dividend enough want to

very think that's we where confident. I So feel

Operator

question comes the line from from next Your of Kamath Citi. Suneet

Suneet Kamath

first we well. And finished factor be you're obviously, obviously, but growth going on I'm a of where just normalization I because, with struggling don't XXXX, the base to of should for that XXXX. there's X% using in The underlying the sense we XX%, terms guess a effort we XXXX. have as question what's that

today? what just expect this we should And bridge to next XX% year? of you then we the year? where we how to for from can for And help So are get us X% kind

Anders Malmstrom

Yes.

we laid had So look, the out IPO, when I we plan. the think

well, to the everything going X%. billion So perform about included of CAGR earnings. guidance general $X.X of growth if account, between $XXX That's had to totality. of This impact as that underlying $X.X basically, be million you an in the somewhere rebalancing X% operating which we're gave an works expected, billion, markets in

this program told we you, As has concluded.

in fully it's effect. So

XXXX. have impact So we full the by

the are impact of $XX the track also full to on get I we XXXX. million On side, by expense think

on of efficiency. that So continue continue kind of the growth work general to two account. to We're on We're to initiatives the I think going business. these the going are amplified work to underlying

our that still expect meaningful same Don't I at it think but a pace, duty. that's the to have impact. expect

from the are Group In addition, we mean along performing see I other think as we just helps I business, on which the business, underlying business. you underlying that obviously constant Retirement work heard And on path. also Mark. businesses inflow the the

continue So I solid good initiatives should to by growth, I you see just supported the mentioned. think

Suneet Kamath

we and Okay. AB? I get to guess Are how all Mark the With you'll sort often. with AB operate asset of let conversations? having in stake. managing management, that's think in you about And are comes on up on my to It's AB second you or own? thinking that that you Or for then participating of do sort consolidation something respect if actively the question a question that something kind quite you its comes about. of that it

wondering we Just should how think that. about

Mark Pearson

Yes.

Anders we're our happy extremely performing of unique consecutive as And flows well. with has I very $XX Asian really operations think, in a I alternates strong capital low net said, growth, billion its with year. of investment AB, and is It's business growing funds The the quarters business. franchise intensive. AB. mean course, in X

is feel answer, it's in anything but any seen well. that. is performing big scale the well. business like is mean to we performing business The I I do the think whether don't desperate to aware of transactions. be We're the situation So

very with We're are the outperforming their competitors. team it. happy and Seth

So good we about very, feel very it.

a, is an it number. As time to Anders used a from imminent we we we don't consider is from number forward, it but expect said, and us. going It's at to, anything are XX% time, will odd look

consider we'll Something it.

Operator

the from comes of question next Thomas line from Evercore. Gallagher Your

Thomas Gallagher

questions Just a few more capital. detailed about

And $X.X at target. above statutory proximal, million, at just above for solving then think I It want can adjusted us? and about XQ, minimum you start TAC a to you from your of the, relatedly, $XXX capital the could that good how year-end the you holding liquid much is So have company? cash estimate to quantify Anders, can says using share know that billion capital share that? with? assets I with for have you that is do I a number total you an was ballpark

Anders Malmstrom

Yes.

So very good I questions. think X

start with a new That's excess $X.X So billion have above billion and framework. minimum $X meaningfully this we number. the capital a XXX% out company. the I We just think target, under our to in in the laid insurance let's translates RBC

much pretty expected. that's as So you

I think when are. right to the holdco get this I But cash, there no can't the give now, morning going number, so file later think where I level. you're to that I we you think the Yes, that K, we number Very be in day. at that's good surprises it solid. but expect a

Thomas Gallagher

is, the my or much the pre-XXXX utilizing put annuity favorable, guarantees? like benefit whether in guarantees? category can then death of that's business, you And living And more of withdrawals, least efficiently of how underlying how benefit withdrawals underlying or Okay. would economically much the or those be preserving would you follow-up outflows utilizing which full are not billion you the quantify at the $X partial quarterly on variable

Anders Malmstrom

Yes.

that. of So we split don't give the

there's You can here. and they there's they But the money policy. lapse it. the because to imagine natural then components in that think people take we retire money, don't outflows they outflows, want people it that they split the want I need both there's to because and utilize and In the give the

Thomas Gallagher

disclosing because consider something that risk standpoint? Is you'd pretty think is that reduction important a I from Okay.

Anders Malmstrom

Yes.

we we is basis, to on line annual the see know But line have. assumptions And update with we an you put the assumptions. So think look, is what yes, for in is really I in we with reserves. assumption it's here in really our think that important -- our I what

Thomas Gallagher

Okay. Thanks.

Operator

Goldman Your line from Scott next question Alex of the from comes Sachs.

is line Your open.

Taylor Scott

cash follow-up preferred question you and just I had the morning. equity that on the did. good holding Hey, just company a

mentioned guess, think that You as the XX% now? debt-to-cap So we comfortable there I some way reduce you mean leverage? is should need are another the is to paying around, like at term loan. I right maybe down you're about that

Anders Malmstrom

Yes.

We in some end to I I the the XXXX. the have we back have So matured, QX. that the of preferred of raised term used we proceeds at is, loan think the that would think, pay question

I ratio leverage are think with. very we have, we the comfortable

capital think because an that our with we right take as very really now attractive go to So structure just preferred. optimize I out to opportunity it's

use to always as want to we but that -- leverage in Obviously, ratio. optimize something structure, the that yes, the really an keep our opportunistically have eye So on mid-XXs. we

Taylor Scott

maybe follow-up $XXX guess on an X I capital. million just And excess assumes then it. the sort And get update about to it? opco the to of it? do If drawdown confirm it's excess, of on what's how in you level, whether the excess wanted high priority you how some at holdco to you use, have if of think terms for I I secondly, a, to, all? you then sort repurchase any look or wanted the checklist use Got of would

Anders Malmstrom

Yes.

I the of guidance just I get can in to half to always the another of our we're later and the made we have a announced opco. most tell very going That's continue from clear. use, dividend the pay XXXX, operating we're XX% entity and So million really say, think year, I what buybacks in exercise once assumes of later out where the the we we cash that repurchase think to Look, the in from I that it think you $XXX let's out the between going particularly also and we year the XX%.

a that's really really managing think capital the -- ratio,obviously, I good payout good accordingly. ratio

pay that comfortable range As in basis. very can economic that feel it's to I a out the that continue we we but model that, said consistent really drives very before,

Taylor Scott

Or a to I environment, And steady -- kind actually quick excess? X excess maybe out just of market would drawing is XX% down normal guess the you Paying that XX% just think in state? follow-up on that. keeping that is

Anders Malmstrom

one by Yes, we I excess excess is down the And business. look of environment then mean having I generate market thing, it some think this the here. takes I way and just new it, about at you important. the the talk normal

I obviously, it's that rates. interest drives market the equity fees a the think from

changes the the get. really see how the comfortable immunized think last we on feel right we now. impact It's equities no the dependent on I there. We're you the days totally where it. much few interest But obviously hedged, very are and weeks really on and so impact we're rate have in fees

Operator

[Operator the of Instructions] Ryave Your next America. question comes Bank line Ian from with of

Ian Ryave

that question to what the missed assuming kind I EPS end are X.X% bottom rates it, the of now, right on are rates? toward growth may have where happens kind what X% My treasury, interest the interest for was just And on range? to of we XX% you target. XX-year stay first of growth that but rate? they if the Are

Anders Malmstrom

Yes.

a it's excellent question. really think I

I before, on we basically rates. think, the said very as are are I we interest immunized

actually ALM-matched have on interest rates. We

we're rates sheet. not to on our So sensitive interest balance

the new component, and that regular a that basis. actually of XX% it's business, rate only has we For reprice on new interest an business the

And I we impact that. that we as so on drives economically interest up not of basically ride before, the is are there. down. rates, hedged the Equity underlying basically think said rate funds. where the is something And market interest But fees I markets, that's obviously and the

Ian Ryave

question And on SCS. the just a then

much with markets of of period. think are about week have their behind this understanding at absorb generally products will they of And But in product the have time of some clients? loss if get conversation rising do market. different first kind or equity absorb that. least philosophically? sold only some know a having been the principal. you When most choppy, products we only Just choppy I this, Distributors last want the think been to that's not it So how of two. XX% a get like of kind the in equity markets

Mark Pearson

years, SCS it's out. six sort is Mark. five know, XX you We're years looking duration. at Ian, a years, medium-term Obviously, of as

So downside protection actually a thing of the are conversation that's the nervous, precisely give bit the for are When has. that markets to consumers choppy first the that reason. value and up and that prepared upside for some

we're at the The there designed is thing looking to at, the market. other around to adjust moment concepts

record mentioned of consecutive So sales as our Ian, in I fifth earlier, quarter it's SCS.

something. up XX% I think was it or

design. the is need will toward So consumers markets, looking need keep to out And downside with protection. We'll drawn choppy the a product at the to continue really there. some be meeting

mentioned, that which is fact As do. can we what is product. like an on Anders not duration, this match We we the interest-sensitive

for very a selling very for very, shareholders policyholders well. and it's good So and product our

Anders Malmstrom

when Yes. And makes interesting there's, mean product attractive. I piece it in. maybe more is, the have higher volatility the actually just the to you market, chime in

because So actually the up of way hedged. go it's the caps

product to this addition XX% becomes we choppy more in a the consumers for policyholders have attractive buffer to XX% And markets. So XX% downside, actually, that. also you like in if

Operator

this Quarter to We for Fourth Equitable would Earnings time take Conference like everyone today's This joining Call. ends thank XXXX conference call. to Holdings

now may You disconnect.

Equitable (EQH) 29 Feb 202019 Q4 Earnings call transcript