BHF - Earnings call transcript Q4 2019 | Brighthouse Financial, Inc.

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Operator

Good morning, ladies and gentlemen, and welcome to Brighthouse Financial's Fourth Quarter 2019 Earnings Conference Call. My name is Shannon and I'll be your coordinator today. At this time, all participants are in a listen-only mode. [Operator Instructions] As a reminder, this conference call is being recorded for replay purposes. [Operator Instructions]

to Investor presentation Relations. like Rosenbaum, to now of Head would turn over the David I Mr. Rosenbaum, may you proceed.

David Rosenbaum

Good morning XXXX quarter Brighthouse Financial's and thank you earnings for call. joining fourth

night financial Our will Relations Investor refer and presentation review our We slide were earnings all presentation brighthousefinancial.com. of be in and to at remarks. you release, released on the slide section last our we encourage and website the of can accessed materials, supplement prepared to these

our President Officer. Today Chief hear you Eric Steigerwalt, Spehar, Financial will followed Officer; Chief Ed and by from Executive our

the Following here our Rosenthal, Chief prepared Operating call participate Myles comments, up today Marketing Officer. us Investment Distribution a we in Also Chief will Officer; period. Chief and discussions Murphy, are open Lambert, Officer; question-and-answer John to the for with and Conor

time forward-looking during from discussion Federal the may Company laws. Our statements forward-looking call results including update of include those the on meaning Financial's call. anticipated today, as the XX, Exchange differ this The within actual described Securities and as obligation no on filings Information discussed speaks February time of Brighthouse the the discussed risks from and Brighthouse statements US Commission. results of materially today’s XXXX. a with any uncertainties, Financial's call result Securities will in information to undertakes to only today's in

to measures on presentation release, measures references And generally results these principles, and finally, GAAP certain of a to be will we of call, the financial management due basis our found the on base most website on accounting of be supplement. discussing timing not Relations of the filing certain accepted in or statements. the by the may preliminary this statutory statutory definitions historical directly our including are statutory earnings based that used Investor slide portion known During measures. measures measures as financial also related non-GAAP Reconciliations non-GAAP comparable to are

call over Eric Steigerwalt. the turn I'll to CEO, now And our

Eric Steigerwalt

Thank as earnings and XXXX good everyone. XXXX pleased per sales, our morning, adjusted Brighthouse very our as Financial made and was less in we items. progress outstanding share very exceeded notable you, statutory we executing a for for targets results our I’m normalized David, earnings significant with strong year strategy.

significantly and Importantly, capital, approximately billion with ratio the we year with capitalization, adjusted compared our for XXX% of XXXX of combined $X.X estimated strengthened $X.X ending with an total billion up approximately statutory RBC XXXX.

strategic several achieved also milestones. We

variable reform capital First, to we adjusted successfully of managed statutory the total adoption in early XXXX. contributing annuity capital growth of through significant

our public SmartCare, product first our finally, life new as multi-manager completed Brighthouse introduced platform. full launch we a to we insurance Second, the investment company. transition And

we with the And In optimization, our including prudently receiving implementation and operating milestones, Delaware. Reinsurance approval manage to to platform. of addition statutory ensure effort service balance capital through stage transition additional MetLife a strategic a focused dividend Brighthouse continue from our Company of $XXX to million to we systematic agreements on a generated take sheet

XXXX well-positioned we of which and expect shareholder beyond. continue we drive execution forward, we in strategy, our that will are value believe Moving to the

quarter $XX stock continued common be in of returner We goal. As January. achieving million approximately one approximately we the continue over consistent we've is XXXX million of repurchased discussed, and goals in our have $XXX previously repurchases toward this make of to fourth to our of of progress with capital in and we time our the quarter first a stock repurchased

common we the expectations. to additional stock. a approximately our company XXXX, that stock announcement the total million our of an up Last authorization our announced have of repurchase Since our well ahead the through of repurchased million of we common repurchase stock authorized $XXX August of $XXX January in initial first night of of XXXX,

next XX the We authorization currently anticipate fully months. utilizing within new this

$X.X Assuming this XX% than our our have XXXX. of of authorization, new way end the will returning by of full $X.X towards to of of target common billion utilization more stock billion repurchased we shareholders our the

quarter me let results. to Now turn fourth

are earnings quarter the presentation. Slide on for highlights of our summarized X key Our

First, strong $X.X compared up fourth approximately sales billion had of XX% another We of we had sales, quarter. XXXX. quarter the annuity with

be sales continue pleased we to We adding very well as quality each business our are of with the as new quarter.

in X-Year excitement as remain and see distribution Fixed our broad week, to we network as last help continuing partners States we're long-standing financial possible, Annuity. end, just achieve security. Indexed distribution we on our Secure To making consumers Additionally, Advantage from the focused United as that our launched

Secure Brighthouse access us continued of network Market to respond Synergy in landscape. our organizations Advantage reflects of commitment to of and exclusive changing of retirement Group, The tailored a the Six-Year marketing Financial that to products directly an gives and set provide collaboration a needs client represents launch which independent

Moving to life insurance.

am our life new on approximately in focus we I to We insurance product $XX as and very from expect hybrid momentum sales the about in enter significant continue excited deposits SmartCare We strong XXXX. Brighthouse we million of the XXXX. year SmartCare. generated growth

progress network advisors. our intend we to And have over access SmartCare roll out of time. adding major additional with distributors over product XX,XXX made for good distributors this product We to to a

billion XXXX $X.X total to normal of Second, outflows fourth up net the annuity due the and were quarter, in quarter from sequentially variation. seasonal approximately down

mix to more new runoff intensive expect the continued in profitable see coupled business over profile generating previously, business. less we flow shift we cash business capital of less our said with as we’ve time and As had a

expectations. Third, do corporate not with $XXX establishment costs expenses, million fourth the include which in our consistent were quarter,

on of corporate XXXX corporate expense We an of basis year-end million are $XX a reduction run in XXXX. still million expense additional and rate by reduction projecting $XXX

in as to basis. XXXX, $XX the XXXX to year our in before million around necessary full to establishment were XXXX. in investments million continue We costs pre-tax will refer and $XXX tax these million in be and and In for businesses. establishment tax million $XXX our Fourth, believe infrastructure technology make a on quarter, fourth we million $XXX approximately $XX costs. million costs investments $XX We before to establishment both

through As TSA I’ve how years transitions said expected we our associated to closer state exits couple step prudent us and managing These our our way final are operating being TSAs. of before, put future system are in of platform. one we

results. of earnings million statutory or the $XXX Next, our touch in very to approximately earnings were the bringing roughly per me share. $X.XX the on total Normalized sequentially earnings fourth Adjusted XXXX million, increased strong let quarter items $X.X at quarter XXXX billion. to less for notable $XXX

continue adjusted our statutory adjusted items finally, notable EPS notable prudently capitalization. less billion growth $X.X in Full-year a compared approximately to XX% manage were earnings, less XXXX. items And we share, $X.XX per or with

approximately year-end approximately As billion above risk-based at XXX% our combined total of $X.X RBC XXXX, adjusted or I estimated CTEXX. capital billion assets mentioned, and ratio approximately with of $X.X was capital

how plan framework Going reform discuss with now capital aligns capitalization business. the annuity manage we forward, using our RBC to variable regulatory than the under rather because we CTE,

program earnings these the across in to quarter, lowered market Our variable preserves strategy to the of will and scenarios. expectations. fourth a and different fundamentally we across company line that economic our profile made capital hedging well hedging continues a the of discuss revisions In moment. perform with wide revisions in distributable risk range conditions our Ed annuity

on plan night, and X hold we March announced AM. the XXXX teleconference and webcast at for update business to X, and we last closing as investors Before analysts

to details closer additional will the call. We provide

continue as during delivered To wrap on our up, results we execute XXXX outstanding we strategy. to

repurchased remain annuity strong, to sales we program our our variable well perform stock. hedging common continued Our of and more

we sheet, as in risk reduced we have variable statutory significant our capital our generation program. balance Additionally, taken resulting optimize annuity hedging steps to in

to continue Going to us which forward, serve. generate our will we and remain confident clients in we the value our believe distribution they for our long-term strategy, partners shareholders, enable

results more call discuss detail. Ed? our the Ed financial turn I'll in to that, With to over

Edward Spehar

I'm year Thank quarter for with everyone. and our the results you, very XXXX. in Eric, good of full morning, and the pleased fourth

improve manage of variable to how normalized now Our position, result our statutory a adoption strong the capital variable early business. of earnings program. by hedging statutory annuity our capital we reform, statutory And metrics a framework our as as with the that of aligns have evidenced have performance and annuity we continue

we to annuity will then on on implications positive manage remarks basis, statutory and with off and through I variable by will strategy, cash fourth the walking a or that revisions comments have VA hedging adjusted Given I for cash our will my finish for start and capital. results, which the prepared discuss our earnings business I statutory up quarter.

parent strong capital from increase of by dividend Delaware BRCD To sequentially. company. is approximately BRCD. start off, $X.X and Brighthouse since two was earnings combined a separation Company driven was statutory billion, total Reinsurance our statutory from dividend the first $XXX the from billion adjusted factors, this $X.X former This up quarter million or The

were equity fundamentals and $XXX Normalized in billion, were statutory normalized were underwriting. approximately equity favorable driven strong performance earnings approximately markets quarter hedge business and market million Year-to-date, driven primarily fourth by the by strong performance. statutory as $X.X favorable earnings

Turning VA management to risk program. our

Our perform expectations. and hedges our with continued in to line well

approximately Assets above increase CTEXX third XX, $XXX a to December at billion quarter. compared $X.X million the were

plus $X our captured upside. program our approximately we hedging in past years, X expectations VA and performed Over the with has line market billion have of

same a have Brighthouse implemented. strong has strategy the initial much market, from at the We that to company time hedging become when stock benefited different a was relative

XXXX. growing it are statutory successfully our have where capital above brand, sales level We our significantly and and substantially higher in established is was

forward. is prudent lower a to Given going these developments, it we strategy adopt risk believe

VA operate strategy are of operating smaller to reduce date. market comfortable our position scenarios CTEXX in and we upside with earnings the $XXX the with to strategy, cushion to therefore revised experience more preserve a hedging across deductible markets. market capital or normal loss revised to than risk, have and relative plan million first no this a from generated We distributable protect With

statutory is if loss. hedging a VA was, mind hedge in throughout As normalized statutory XXXX be or to the the capital target strategy related earnings. maximum the our and and the than in required deductible The reserves keep a there could deductible range. impact this in concept would thus and Also, total in we reminder, offset was greater billion loss would But adjusted a it substantial deductible $X billion assumed be plus $X to XXXX first capital. initial that have

framework also with we reform, our manage the business. VA I like with would to how reiterate now adoption that regulatory aligns of the capital

our RBC capitalization we non-VA actual discuss projected Given the fact a rather using and going this combined alignment that forward, than ratios we and CTE's. large will have business

combined ratio RBC XXX%. above XXX%. our XXX% This is We of ratio to estimate target at approximately well our XXXX RBC

dividend capacity XXXX ordinary our $X.X subsidiary billion. Additionally, is total roughly

or of As of Life the to Insurance dividends XXXX. Brighthouse our and more than result from in a substantial plan Company strong currently pay deductible capitalization, we in BLIC $X reduction billion

incorporate will As business an our X which and update will investors on as related the we update as VA hedging to analysts Eric the mentioned, for revision provide call plan well strategy we have a distributable on March to sensitivities. where earnings,

Before adjusted the move our I were roughly XX% end approximately like to which to fourth of sequentially approximately ratio liquid leverage our on fixed would Xx flat financial also quarter, of mention, was earnings, assets is million, our average charges. company holding and annual $XXX and the as I

night on $XXX the same to quarter earnings the Moving million, quarter million reported third fourth and XXXX of items excluding with the the notable $XXX of adjusted basis fourth Last in XXXX. of adjusted in earnings. earnings which from million compares quarter we of $XXX impact adjusted

further actuarial in adjusted after-tax of $XX Other. from notable basis the net increased million basis The Corporate items on quarter, were notable two an million & certain were establishment million. a refinements costs which in $XX a and on by benefit assumptions $XX items to earnings There

equity investment the adjusted margins, items an underwriting better equity and the increase positive the notable respect performance separate in impact, income partially expenses. fourth offset in market were Sequentially, by in along quarter positive the less driven With quarter. favorable by by driven the account net returns were lower with X.X% to market earnings corporate performance performance

As DAC impact reserves or per and decreased share. a amortization million sequentially of combined to a for $X.XX earnings $XX adjusted result,

return to we The one change returns a equates slightly that guidance account to to in share. sensitivity per was changes every of DAC amortization have reserves in point $X.XX below account given the percentage separate and $X.XX separate

quarter. income income as in investment investment Alternative the fourth net sequentially. lower decreased compared return prior quarter with was Next, the the X.X% X% was in

driven growth continued our a partial sales offset. strong Asset was momentum by

impacted Overall, was we Moving underwriting to on consider were improved relative insurance what favorable favorably to normal quarter. results a businesses, our be margins. life underwriting to sequential by

to above compared corporate and $XX were Lastly, million, which the full-year tax $XXX approximately expenses level. before up above brought normal level, quarter the corporate XXXX third million expenses XXXX the slightly

and a reduction on corporate mentioned, $XXX in year-end expect Eric an reduction corporate basis As expense XXXX, still by expenses we additional $XX of run of million XXXX. a rate of million

level, notable unfavorable earnings earnings. with quarter. the annuities, earnings were adjusted offset segment were lower by excluding fees Expenses segment sequentially, million adjusted impact. partially Sequentially, excluding and in starting were results were offset in the Adjusted impact were items higher $XXX million which on an by to in was Turning notable the partially lower $XX had earnings at items impacted income. by market the net favorable investment claims, lower quarter. the Life This

segment quarter quarter, The our to segment. Results in the which in line year results the notable better earnings XXXX adjusted $X expectations. strong were reflected for reported of excluding were than Life Insurance prior The and for modestly the fourth runoff full with quarter. items the XXXX million comparable

the by with balance we strategy the from loss shift higher scenarios results strong capital separation. notable quarter. an reduce Overall, had $XX adjusted position market distributable capital We we already to were very our hedging generated our market as and Other our continue equity increased risk, excluding to this I'm earnings Sequentially, prudently items and statutory of pleased returns & taxes. driven preserve sheet million. since across Corporate results strong manage protect

per earnings grew XX% items XXXX. were and the solid share in adjusted in compared XXXX full Finally, quarter fourth year notable less with

the turn the to like operator we'd your that, for over With call to questions.

Operator

Our Thank Suisse. question Kligerman with from Instructions] Credit first [Operator you. Andrew comes

line Your is open.

Andrew Kligerman

morning. good Hey,

for the So quarters the rates. I second In I'd on of benefits kind reported think, Brighthouse XXXX, have like substantial focus and to third of hedging from, increasing hedging. the interest

incremental $XXX $XXX million benefits. million I of or generated you think

seen the has is, And bps. into changed that XX-year we've strategy maybe we’re XX given already looking XXXX that and the question down so

the of strategy be as in might that what a hedging capital changed what we So effect and XXXX has on XQ? result saw year? this from XQ But

Edward Spehar

Hi, Andrew. It's Ed.

I'll my and prepared of was by So $X.X market comment a remarks. think as benefited the I billion favorable hedge from normalized strong off statutory significant on -- in significantly I start with a earnings performance said

allowed us the benefit our significant of strategy So up really old markets. to capture

So earnings reflected that statutory last market really the significant strategy. year we had capture

forward, upside will look significant we looking same will obviously talking But strategy So we're earnings have to a more we not to a and very limiting have in distributable benefit as the downside. be about that extent. consistent profile terms will of capture a

really think a low significant to interest rates, protect year idea key the earnings the preserving we So of driver. statutory When you we continue against rates. last had about is will ourselves

rate don't -- So significant large know we as you from benefit last as numbers pointed and stated, that the what is I you out, but our you a did hedges. see year

We continue significant protection as strategy well. that and element rate will be an revised to the have of

Andrew Kligerman

it last because $X X.X. billion. to X.X quarter, as just how potential I'm the I about really so for the more shift of the kind about $XXX definitely or risk as recently about was versus I And just kind that wondering talked putting million in -- capital strategy. of like cost risk prudent at think Yes, rounding out, And just of amounted you’ve think

the we into in So give costs the Ed, forward going you might see us what’s could hedging that -- delta -- little a could earnings?

Edward Spehar

Ed Andrew, again. Okay. it's

we're from deductible high you as of pointed deductible the key So this is out, to strategy. element low moving a a strategy revision

the we stress obviously a So reduction losses is benefit meaningful in here have in our scenarios.

which this to us earnings well. a does key addition, across preserve more scenarios, element as allow is think market we In distributable

program, more or more are less more symmetrical we hedging -- the of and terms means have options. swaps moved we to In moving which to hedges,

And also think losses paying fixed from is market let's sort you the it, time and on think right, related would say mark say, the element options about market. cost the costs, premiums way you've in got just to So about have the decay. gains you're of when you or equity I the the hedge we of

and a going movements. So symmetrical to time have mean and costs. our as options hedge gains in we strategy it of to sensitive from losses more moved have to away hedge market the our we are the does be But decay swaps, that to element reduction

the a we by And the maximum of markets see. the In markets, up I the consistent. defined we driven strategy. hedge goes down up, loss would hedge hedge pretty what in context look insignificant we the in because stated, balances. equity benefit hedge finally markets, But this that first the revised be have I’ve in revised keep have fees much down flat expect the obviously reduced significantly are costs VA position. just continue in have at future costs of would So we account have way I call to with In markets smaller as to benefit total the more would would associated costs normal substantially significant the when to associated with market we loss reduced think with our strategy. costs But mind markets, we

Andrew Kligerman

Ed. helpful, Very it. Got

Operator

Thank you.

with Our comes Evercore next from question ISI. Tom Gallagher

Your line open. is

Tom Gallagher

Good morning.

the at dividend to is out going on reducing take billion company you of BLIC $XXX XXXX. or What the Clearly, what that? you holding are more that lot that’s question give First to a with Are plans in more the that? than your leverage than planning buyback. are your $X you on thoughts million expect

Edward Spehar

Hi, Ed. Tom. It's

be let about a plan. specific dividend bit little me more the So

And BLIC we normal plan the about the billion the is we before number, you dividend $X.XX taking of million revise think relates approximately more anticipated other $XXX that And billion would've we XXXX. $X could about from take So that in revised dividend when than you to hedge to strategy. think strategy. even

this I continue authorization, million cash to company, BLIC We assets. the share if ratio over build the compare of just that invested time. some capital out, managing about to is from the it you think holding holding company, cash see we with company. new prudence prudently you to liquid see can ended assets year we at point to you down the that around the think the think holding to would increase you I target an buyback assets the as and prudent plan at and dividend XXX% invested holding of pointed in XXX% think $XXX that The company, it's flexibility So cash company to holding at our overall risk-based the and and

the is think or you type this we've with what see to be been along. see going what think to you all saying expect I of from us consistent should

through that returning go double-digit that think see a buyback, as In of shareholders the you is position a capital math our terms strong. the buyback a because is cash position, market of of very We form current you anticipating I'm to this percentage capitalization value the equity proposition. compelling the pretty in

Tom Gallagher

the the almost -- so a billion plan lot a be probably would the maybe Ed, what run with But at the company company. to excess lot plan run up the access for that would holding at with to amount, time being? - to holding with you be So, the be more a just $X.X

Edward Spehar

Correct.

Tom Gallagher

under expect that that people that Brighthouse has take biggest question head that of of a flows the provide of context or a and should Okay. heard cash earnings on can bit BLIC of consistent cash of expectations amounts flow And wrap be ongoing about little of is, would year? able whether that in in stock about story percentage the how more terms subs kind GAAP surrounded a a Because has basis. about been dividendable I baseline your the you terms think scenarios. range my the Ed, think every it's around the of Can follow-up then out proportion I lack we quantifying to other their comment a you for distributable and earnings or earnings a terms in dollars to

helpful. So frame that be you any kind can way of would

Edward Spehar

Okay.

we the number. to first are BLIC So that, And say -- from be good I plan the out would $XX run the indicative a dividend the we see would million operating $X.XX taking I consider about pretty separation. $XX is since first we is take this think is million billion $XXX more we what us dividend company. that talk normal BLIC this rate the year guess from thing of is the Of NELICO. of from million that dividend more would And heard to you've to of normalized

us the last company of quarter other get You also associated the to flows heard than call, we the discuss on flows holding that $XXX about dividends. million approximately with

kind year. of that you a in of what So gives normal comes a sense

to on X distributable on to March going the to are our scenarios. get specifics We update have until earnings into under wait the business

we're of As still sort appreciate, on based analysis you finalizing that can of year-end. all

But of will have hedge we base strategy. this hedge $X is, sort I to made I'm say on here a that the million. the a that in about that And thing material strategy considering better the under out in going we So to I difference in here maybe expect the that. a deductible you costs, old versus comment revised on not wouldn't costs help hold significant billion is off with direct our the to you I bear scenario, clearly would -- reduction from $XXX think the limb to the one a out lot to scenario, up

Tom Gallagher

Thanks. Understood.

Operator

Thank you.

Our with from next Ryan question KBW. comes Krueger

open. line is Your

Ryan Krueger

Good comments company from plan you to $XXX Hi. time? the Re. from dividends BLIC, the guess If weigh holding you that up over that Brighthouse BLIC on Thanks. dividend mentioned I something also into On did your million the morning.

Edward Spehar

thank for I are from to in do Yes, mention meant taking because you BRCD. Hi, has nothing XXXX Ed. we to received from we the bringing dividend that up, The It's Ryan. with BLIC dividend that.

target. us dividend toward obviously to, above And target over XXX% And you we is clearly as benefits that the ratio. is would basis. XXX% strategy the that gives BRCD So more on our our to think risk-based say a manage capital flexibility statutory I XXX% time. alluded to

Ryan Krueger

well an to risk thought of give just the can solution lot guess us this, potential all of process on And changes hedge the of annuity Okay, as you’ve thanks. context update your strategy. in I made you can variable then transfer a -- forward. going you

Eric Steigerwalt

look gotten it anything without add bit in at there's that little I would think really then a executable, doing Hey, position of long-term my we've I Ryan. we doing goes absolutely is it. strength. shareholder If consider hasn't transaction It's a would don't this haven’t say changed. would a Eric. answer I call value and can I’ve I from beginning consider would future, actually had saying we and we hope where the And here a that the said question. conference since

Ryan Krueger

you. it. Got Thank

Operator

you. Thank

from Our JPMorgan. with comes Bhullar next Jimmy question

Your line open. is

Jimmy Bhullar

Hi. I annuity at because similar -- question pace on in are market, just specifically Shield. a buffer lot you’ve the had were companies for and in a faster, overall and just your than competitive seen but before. of growing your you other outlook market environment a products the annuity to fairly Shield And with slower come out you the

So on trends of what just seeing in any the terms competitive comments market? in you’re

Eric Steigerwalt

will It's Jimmy. Hey, I Myles jump in then let will and Sure, here. Jimmy. Eric. I start

who to is, had sales a us. They for our advisors, work have working and to done of excellent really of growth. Just hard we've job want thing while years thank a the for the And partners them. I Brighthouse, say one we're distribution I number here terrific at got

to calls a from get We product new got we’ve that new came just continue inbound out. distributors and

Myles walk through little So a turn over it let to you it bit. me and

Myles Lambert

you our of big Good fourth Shield we our marked results. yet quarter year very driver question. with pleased last morning, that. Yes, Jimmy. Thank remain a Actually results quarter Shield best the with so the for

three did of firms a mentioned sales. for $XXX is moment million Shield first about and just As those Eric with our their full-year three that in firms last year product incremental selling ago

we as distributors new continue well and channels enter to our on new So Shield very add optimistic. bring remain wholesalers as as with product, we

to We are be this continue going type to of grow. able

Jimmy Bhullar

coming terms products their in offering? competitive environment fairly pricing And in similar still with is you terms think other the of out rational and companies of

Myles Lambert

environment. a product competitive Yes, for position thing advisors validates -- I It and like like mean, good the product the within further category. our we positioning competitive consumers. our it's and think the we We category

it's thing. good think we So a

Jimmy Bhullar

it just or you just roll ramp year through sales -- your And how And expecting you this further expecting products additional are distribution to -- the up? fast of introduced mostly out previously relatedly are are assuming you is product? Life any your expansion to

Myles Lambert

with are making pleased very SmartCare. are we we Yes, progress the with

the selling will deposits our over XXX dozen also products are cases. had focus for are the looking a year, $XX now to half the of foreseeable the be we We future. second new We quarter, about paid million fourth in this product firms. year. of through SmartCare the for but In we a introduce

Conor Murphy

just going orange I'm talked to about I And about of in Connor. -- increase ago last It's talk over well. looking over call, beginning -- call coming are will of sales add Maybe back as in a as year substantial about the you at what can and the next at to Jimmy. the little Hi, we couple a a outlook quarter. outlook we which towards we here the and Life sales nicely again the in continued first years momentums

Jimmy Bhullar

Thanks.

Operator

you. Thank

question next Our Goldman comes from Alex Sachs. Scott with

open. line is Your

Alex Scott

morning. Good Hi.

had statutory earnings. the I was question on First just

XXXX not and of the of go-forward through to terms great of the implementation generate, guess just forth. because probably expect in so thinking been is I of reform You representative VA

sounds to mean that. kind to be So you’ve normalized help out with of us that stat calling I I in been if you I line the XXX was wondering relative is expected with what could like mean you that mentioned? roughly earnings.

is other use just if some expected So I of was interested the stat there earnings?

Edward Spehar

Ed. It's Alex. Hey,

look if $XX So million say comments on you from at million made $XXX NELICO. $XX million BLIC and dividends, the to from I expected so the

combination that then we're take you remember, -- If and growing.

good So heard, there's very sales as you a story here. just

is strain Sometimes as should, it that. with much I as don't some attention there it that associated gets but know

to about those I’m about thinking a earnings, if take number, something but going it's you you're stat two not so And normal assume give that. dividends and

Alex Scott

growth? should use how for in frame business about think amount the you could And it. of that's we Got sort capital

Edward Spehar

ask March Yes, X. I think that our business is an excellent on to at update question

Alex Scott

then, And quickly. mentioned The how Okay. housekeeping know much come you it down. overall, I one more expenses, item corporate maybe

IPO, run rate relative. had the the million it's in the Can you expenses trend how down corporate you after like this the XX how off I for that think was quarter? $XXX that come frame just and months will should XXXX

Edward Spehar

Yes.

all, unusual. of quarter first was So, this

adjusted of market that of account our $X.XX run the essentially about relative rate being I it think to earnings, a fully assumption had way a about And above expenses probably level. if we by at returns. share offset XXX you was the we've favorability is -- for separate unusual normal the to think look base operating

expect fourth is or we first not So the level the clearly what quarter XXXX in expense would throughout. indicative of of quarter

rate you In be expenses. which had the is terms target, would the million, as is referenced initial of our basis that the starting for XXXX the point versus $XXX run what half of and given $XXX expenses annual target corporate that second reduction we million of

Alex Scott

it. That’s you. Got helpful. very Thank

Operator

you. Thank

Our next question Autonomous comes Bass Research. Erik with from

Your open. line is

Erik Bass

you. that Thank well question. the in Maybe fourth last higher around mentioned up on impacts specifically the as the market as annuities favorable quarter noise, expenses. you some in Hi. And following

So help rate about business power can the in earnings run the XXXX? us annuity of you think just

Edward Spehar

do help I'd overall. bit of little think I what So, company, rather on rate the a maybe is the of run earnings give power you

about and looked number full-year 'XX little And higher. number talked -- see and There in corporate had thinking takes we you expenses market a bit favorable, every offset. maybe this was said, XXXX. I and the be whatever just are a quarter, in going the puts the by XXXX, and and probably in growth essentially be out obviously the the at you the little is that I of to little you're if quarter. to just So expenses impact underwriting a if to the I think we pretty would look driven or buyback buyback but about, decent overall items We as that big referenced they reduction would about

Erik Bass

And program. one Thanks. helpful. That’s it. then for the hedging Got

based have from strategy implications flow Just an that on the the away of have cost impact since, guess about can options cash for you the free program? does I And cash you purchasing outlays an shifting required upfront options? talk of

Edward Spehar

I all. hedging No, more the is not -- an with the implication associated needed at is a be liquidity think us strategy, for there that issue cash but could symmetrical

old costs is hedge our back earnings, mark there losses would and a the paying that swaps. see distributable the strategy you a premium like that I and again costs hedge market the to to I the and in that of expect symmetrical terms In as scenario, would made time type And instruments decay base in between the overall. with options, the new and with defined to I comment not gains material you're strategy, associated difference go say,

Erik Bass

Got you. it. Thank

Operator

Thank you.

comes question with Elyse Fargo. Wells from next Our Greenspan

open. is line Your

Elyse Greenspan

point Hi. in guess, kind it that related capital question, I year, as if Thanks. fourth And morning. My repurchases, share went all And think the dividend sounds talk we throughout about that repurchase quarter. just dividend shareholders. there. repurchase, approximately should another throw Good place. will guess I assume the some guys we return perhaps that I said we you first from BLIC the It say to during just and take about of then should that should about the at that’s consistent versus with capital question metric main think

Edward Spehar

Hi, Elyse. It's Ed.

I the you that on assume is should shareholders. yes, we're capital So buyback way the think last think returning to question, I

spread middle it see remind probably you your terms then I expect BLIC to of should think the XXXX. out And throughout question. again me in dividend,

Elyse Greenspan

was I about … being share Should we about even kind asking that of throughout think repurchase. just

Edward Spehar

right. Run rate,

run I dates lower seen. think the first the the will a -- lower of we've bit you so the -- run see the be with in associated run the would be really -- than blackout think less a I update rate call, So rate it rate quarter, because slightly slightly little

something think consistent should be at like $XX quarters. $XX the million, I if like with subsequent we in three look looking you probably maybe then is you've the it's prior what million, at would you seen quarters, expect. what that And

Elyse Greenspan

And helpful. from $XXX coming That’s not correctly. part up RBC time. the necessarily with XXXX. drive of of in Okay, that that million sure make I That’s just over the That’s I dividend Holdco wanted the in great. all BRCD. to understood then correct? Is terms down

Edward Spehar

Correct. XXXX. to Except I say to take that no a Holdco modify in bit little there any of the plan is to would it just

Elyse Greenspan

Okay. Thanks. I appreciate the color.

Operator

Thank you.

from comes Lee with question next Our & Humphrey Dowling Partners.

open. is line Your

Humphrey Lee

thank my for Good morning you and taking questions.

the the program. on back revision in kind to hedge circle Just of

the past, used so, that kind it's has still swap. money as and So kind past? out in the in in changing the was of part money options now changed program? of hedge of of element your compared And strategy, you Is where an the of there out of of if component kind to it to the that

Edward Spehar

rates. It's the Humphrey. out There's of Ed. Hi, associated with still an money component interest

Humphrey Lee

not equity markets? But

Edward Spehar

but substantial -- some, than Yes, to any … not

Humphrey Lee

Okay.

Edward Spehar

different. … much, much, much

Humphrey Lee

in plan keep All that below being XXX% the you you you’re little about is a saying period. bit of right. talked until a at least to on terms But gradually more XXX% intent would understand Got RBC time draw of won't a there to it. RBC additional draw hold to level buffer the And to any at then I probably XXX%. -- essentially Holdco down least down your for the from kind near-term, at in later you that while it so see to the

Edward Spehar

the your about was what the cushion? question Humphrey, RBC of part last Sorry,

Humphrey Lee

Yes.

any you now the you to XXX% of guys holding XXX% XXX%. similar there right target additional have liquidity and versus time buffer cash plan at a to for the hold Is more being onto to Holdco? So, to

Edward Spehar

mind RBC billion in of a BLIC, by about that combined is billion. the comes $X.X as ratio lot, of the right. keep $X.XXX XXX% down may you out RBC Well, The we take denominator

that obviously, to holding company the movement So, what you're of is seeing. RBC

Humphrey Lee

it. Thanks. Got

Operator

you. comes America. question next Ian Our from Instructions] Think with Thank Ryave [Operator

line open. Your is

Ian Ryave

Thanks. morning. Good

annuity policies competitors earnings decline past One were policies you these XXXX, I to charge When rolling roll of in as policies dynamic would some legacy are they periods. a about a kind expects happen that of your many they’re sold in And of Since off, them XXXX lot sold, surrender think well? XXXX. as this in these could to off? Met have of

Conor Murphy

is Conor. This

expect But seeing be you consistent taking bit a outflows we for you're XX if pretty remarkably would will. quarters. in XXXX, say take was in little level the you're me XXXX. and different I of different down to last maybe and it consistent we’ve a over Let us consistent -- That that. right, tranches,

out. seen over So last have sort we that be the some will policies XXXX, XXXX years. we’ve now that few phenomena But Met rolling of yes,

the XXXX. little a in can at it now have actually we level where is X-year Shield's bit. that We started we much selling of sell but it,

there well. So really there as significant is nothing

So all the what of of our And again, perspective, that for into we getting intensive growth That consistent is XXXX. in from inflows, this. time. that us a continue more just positive to flows significant a out Obviously, should pretty level much outflows. us from improving constantly from is and largely the position about it reminder trajectory seeing this see business We ago. a we're not plus talk like of years an much sort of XX of older capital

Ian Ryave

the the Got losses. Is of of out more this increased And of options? using of function on and it. you. gains than hedge the Thank sensitivity just to switching a just swaps money

Edward Spehar

Yes.

Ian Ryave

Great. Thank you.

Operator

will back now and call I Mr. remarks. over the Thank Steigerwalt gentlemen, for closing turn you. to Ladies

Eric Steigerwalt

a Brighthouse. here. I and Thank had you was XXXX great hope great Obviously, Well, you, we year. operator. a year a sense quarter a got great for

about move value the that off. paid we're years, we is that to of extra can And watch goal I adding as forward. into this discipline You flexibility. see as shareholder last an And turn you is of level our now sort think if it our X.X in flexibility

to earnings and talk prudent fourth we managing on to business, capital quarter market strategy said, we three our and going call more at and about to fundamentally be and couldn't March in four profile The lowered progress. And that. we or forward. on our call, Ed various to our in with will update revisions times the as off approach least this just thoughtful going hedging our pleased are the X. scenarios made obviously We've across I paid continue do it's risk more our that preserves been distributable in

XXXX for believe well continue are running and to to this shareholder the of stakeholders positioned and company drive beyond. expect that execution and our We are of we all our strategy, we value in

to with on March being for thanks the and you X all of look call. we forward So on speaking

Operator

this today’s concludes for call. you Thank gentlemen, participating. and Ladies conference

You may now disconnect.

Brighthouse Financial (BHF) 11 Feb 202019 Q4 Earnings call transcript