BHF - Earnings call transcript Q4 2020 | Brighthouse Financial, Inc.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning, ladies and gentlemen, and welcome to Brighthouse Financial’s Fourth Quarter 2020 Earnings Conference Call. My name is Josh and I will be your coordinator today. At this time, all participants are in a listen-only mode.

We will facilitate a question-and-answer session towards the end of the conference call. In fairness to all participants, please limit yourself to one question and one follow-up.

conference recorded the replay reminder, a is for being purposes. As from ask session speakerphones call. that we using portion you today's question-and-answer Also, the refrain cellphones, during or of headsets David turn presentation to Relations. like now of Investor would over I to Rosenbaum, Head the Mr. Rosenbaum, you may proceed.

David Rosenbaum

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

all can our slide the review Investor on and release, supplement these website Financial earnings you Chief accessed brighthousefinancial.com. of and Our encourage were Officer. released Executive Spehar, Ed you from section of Today, be financial presentation last at We our President Officer; night will and Steigerwalt, Eric materials. Relations and to hear Chief our

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

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

GAAP Investor non-GAAP be related will a and not may non-GAAP Principles, basis found we as measures certain call, also by are Accounting these directly definitions on the based preliminary Reconciliations references I'll And in website, Steigerwalt. are most historical call this During including statutory turn results Accepted that used measures on to over of the finally, comparable to to the measures. filing statutory statutory be Generally Relations measures discussing financial to of presentation used Eric statements. on the now, our management portion the And of by of our base earnings management measures due CEO, timing financial certain slide supplement. or release, our known the

Eric Steigerwalt

Once Well, no Thank you David well. a our loved everyone and hope XXXX year and that ones morning world. today the your remaining communities was are good COVID-XX safe pandemic Capital like listening were and the other again and markets upended volatile. I everyone.

XX-year the similar tremendous dedication reached a level as followed Over year. the rates we market volatility. XXX thanks by saw total employees. recovery the the execute interest for we quickly all XX.X% a our XXXX treasury course of of to Throughout in to resulting Long-term S&P U.S. saw our and an this strategy the bear return by measured record on of continued

the Financials As situations critical. been Brighthouse those by millions Americans the financial pandemic help including has long have pandemic people affected the slowdown. At to of we COVID-XX The retirement security concerns we to term. evolve achieve mission been security more already that continues economic and mission never and financial working to those financial achieve and people our over retirement to well-positioned are believe on strategy of in Brighthouse and remain focused and help continue address the resulting

focus of We than provided help the Foundation financial a XX during and Brighthouse trying to communities. meet made response The are on our assistance Financial pressing COVID-XX some Throughout on contributions Brighthouse focused profits also racial financial most equity. more with our of these needs XXXX times. communities to

for of results to to this Before strategic on touch accomplishments year. like the our turning would I our quarter, some

to repurchased common we of of year XXXX. shares approximately XXXX, the reduction XX% a in million First, of stock relative $XXX our approximately outstanding end

significantly profile reducing our revision the of the of hedging completed we strategy company. risk the Second,

or distribution $X.XX results our network. of company. and and ordinary Third, billion strong independent the insurance, BLIC primarily sales dividends of we holding first an both the Fourth, life we BLIC became Insurance consisting public billion products Company since two to dividends company expanded new in by had annuities paid Life $X.X approximately paid from we Brighthouse launched

achieved reductions of the effort we million we run of $XXX in exceeding our our significant And post and year separation million. to relative technology operations $XXX rate future our Next, progress made platform. expense target implement to finally multi-year first state

to financial So now our results. let me turn quarter fourth

prudently to continue capitalization. we First, statutory our manage

Our expected fourth quarter of in hedging the as performed program XXXX.

RBC ratio estimate we risk-based Importantly, our combined XXX%. was that or capital approximately

in year approximately billion. assets liquid of the provide company on holding Ed with $X.X a results the ended we of Additionally, minute. details statutory will more

quarter, sales billion, a sales approximately of Annuity strong XX% XXXX sequentially. quarter fourth were environment. compared Second, up with we despite the the $X challenging had XX% up and

million life approximately of with our of made fourth strategy. life sales pleased am I that we generated we continue XXXX. progress insurance quarter have we the the in $XX insurance Additionally, to on as execute very

by Third, let near returned to in which normal me as turn sales quarter net the driven continued million strong total to annuity were inflows outflows level. $XX

technology and as our continue these investments We more business. include coupled necessary we have finally and we previously, of costs the were profitable million in establishment business. less which as our investments generating shift million were runoff fourth over our the do establishment In to with As business $XXX expect we the we see a flow costs. in infrastructure time and pretax. to approximately cash expenses in add $XX quarter profile capital-intensive less to costs continued mix in said Fourth, quarter not establishment new corporate refer fourth business, make

said results strong. remain demonstrate I've a balance liquidity As our strength we entered and sheet the our XXXX current from climate that before position of in and

I our areas like call to results, focus of for discuss our Ed to to financial Before XXXX. would touch turning over on the

execute to our on continue strategy. to intend we First, focused

manage we Second, continue our plan to prudently to capitalization. statutory

we normal said between of have we and XXX% XXX% As in a ratio previously, RBC markets. combined target

drive new to mix business business. our we adding of the want Third, evolution by further high-quality

annuities. sales Our rate very results strong, XXXX fixed driven in were by

to be we our are wholesalers our as deliver very lifetime out shield expect well annuities solution enhancing more annuity are to to in help execute growth more continue SmartCare excited currently lower. designed life millions we expected rate XXXX throughout we to American life and firms workers income and we fixed products on with that while about XXXX insurance and as shield remain is adding of In variable as path committed strategy. simplified investment their to provide a focus For to to our rolling BlackRock's paycheck And selection retirement. access with sales on

That's said, to We an in We $XX intend a XXXX million as committed XXXX. we to we our professionals continue to would our the additional manage well in infrastructure continue of $XXX in corporate relative like as $XXX the to million company. With the their the contract a target expenses XXXX. distributors year as our cumulative prudently and previously Next, exceeded in achieve to with in holders. and million in first goal reduction commitment our our providing policyholders financial reduction will and to remainder XXXX expenses. public of better to expense invest support that

state This TSA said to The We more our of before, total let we two And have repurchase of is to as currently the Since additional of are TSA over of state an August share of XXXX. occur of platform. being in repurchased common expected the the expected repurchase years common million us up of closer company. our in future this we transition a continue associated I've million repurchases. we to exits way an first public to managing lastly represents and time me stock put technology of majority establishment our $XXX of became X of next approximately As discuss XX% year. prudent future our to years stock billion the systems our than anticipate a Last operations of February XXXX transitions announcement through couple shares an outstanding operating reduction the of we are These stock. how in final expense about through exits. authorization authorization independent platform. our we costs $XXX we $X our and announced night from

million remaining and announced repurchase XXXX. under utilization our $XX $XXX of of Assuming authorization February this full authorization new million stock the in

We to returning target the $X.X XXXX. XX% the repurchased of end stock, of will than towards our billion by of common have shareholders our more billion our $X.X of way

shareholder are Ed? long-term that that like have place flexibility deliver believe continue we well-positioned of the the that right and regarding and As I a return that would repurchase capital we prudence that target share Ed strategy. have financial With liquidity With achieve. to to and execution said discuss value emphasize to To continue before to to we balance have we future over are our call I'll wrap and strategy said sheet strong to continue our authorizations. will the turn we this in results. we up, positions to

Ed Spehar

year Thank quarter XXXX night you we morning preliminary and good reported full financial including Last results figures. statutory fourth Eric everyone. and

and we As update increased year. from capital the paid in TAC $XXX liquidity at ordinary remain by which combined our total fourth ordinary full from in strong. planned than call XX. evidenced year billion statutory dividends increased favorable the adjusted the which our by subsidiary market Total plan despite $X.X XX billion quarter $X.X environment up Insurance dividend Company more position million subsidiaries to last XXXX the quarter the capital million was line Brighthouse at from of or ordinary in these BLIC. March were fourth results $XXX or December billion September our TAC Driven on business $X.X included our dividends during for early Life with communicated insurance

ratio target normal of December be combined RBC RBC our risk-based capital which XXXX Our at XXX% XXX% is above XXX% is to ratio markets. or to estimated XX, in

the to Additionally, in earnings dividend roughly quarter, million breakeven. In statutory normalized $XXX we capacity is total fourth ordinary had subsidiary close XXXX.

had in we XXXX. which entirely of first For the weak due full the $XXX statutory million was to results year normalized loss quarter a approximately of

reminder [cash] $XXX quarter driven with a reform. million by primarily first associated VA was adjustment loss As the a

volatility contemplates Our VA the hedging now that reform. accompanies tax program

have on XXXX, increased rate at rates environment though the normalized pressure earnings. recently, exert statutory to Looking low continue interest we anticipate will even that

company. $X.X up billion We liquid quarter ended $X.X fourth the at holding approximately the to of with Moving XX. billion, September assets from

to to in holding appropriate current continue the it have is We conservative position environment. company the a believe at

$XXX use lowest adding attractive of issuance preferred fourth notes. structure. ever for capital $XXX quarter We permanent at issued rate. senior also million This proceeds and our our equity dividend We stock to preferred took environment and to our was advantage in of million of tender largest our X.XXX% the market by the the

on that slightly plans company prudence above capital to we to $XXX dividend holding We the To will pay from be to when our this million for and BLIC subsidiaries as top priority. dividend continue for half what currently dividends of end which capacity in more this our XX a contemplates plan ordinary operating with identified a evaluating continues year. call flexibility March to XXXX emphasize dividend than expect from consistent or entity. dividend million strength The $XXX normal update I is a as less

million impact excluding of earnings. impact reported third the million associated the fourth state items million same of an XXXX themes approximately modeling with $XX There of XXXX. in notes, corporate Last company's $XXX and with $XX quarter to to associated which the quarter senior the less future fourth the and night four major notable which by quarter of adjusted earnings repayment notable impacted Moving $XXX adjusted and were transition other in a three of were adjusted the earnings items unreported corporate we that on other There were the debt unfavorable claims in also from $XXX fourth adjusted million items. $XX million. of earnings included items the adjusted in and related on platform. for repurchase earnings quarter a $XX to reserves in after-tax costs establishment compares million the basis operating notable lowered of with basis quarter million our expense notable The

was underwriting than lower First, expected. margin the

for quarterly million is $XXX Our between and direct approximately $XXX claims $XXX with claims million million. net of average average

overall versus $XX the as year. investment in investment fourth from of X.X% at alternative of to typical net margin alternative experienced The alternative returns this end there margin Offsetting XX% we fourth million the quarter the claims expectation along throughout investment the upper XXXX our the was X% and strong XX.X% per long-term in with underwriting lower yield higher quarterly year quarter. in full our the very year average. were is yield was As COVID-XX of variability the claims underwriting

above above Additionally, XX.X% our our quarter's share returns was return a contributed $X.XX quarter. separate significantly and the normal results. were in account This per assumed

run third Lastly, quarter was were rate. in this expenses our typical the Corporate as $XXX quarter. the and elevated expenses than is fourth quarterly than higher million higher were which

The margin income. to were quarter. items quarter. fees million earnings impacted had were partially in segment income net items income. Corporate expenses. a partially notable results of runoff loss notable higher reflect expenses. adjusted investment underwriting results reported earnings annuities higher underwriting adjusted investment an adjusted and higher net items driven by notable in offset at higher million investment adjusted a Turning margin higher and earnings Sequentially, results the lower benefit Sequentially, and the Sequentially, $XX segment $XX of items notable excluding by the $XXX net higher lower by quarter. a earnings level, million. adjusted were excluding partially by in excluding other by Sequentially, Life lower were the offset tax offset results excluding by were $XX driven million

an mention earnings our would I like update provide in Before I sensitivities for March. to that we distributable plan VA conclude to

priority at the will predictability We liquid believe time. business level and company drive distributable order of continue to which legacy distribution VA top from and to protect sheet Our balance in shift book our assets should over be away earnings substantial the our this increase the holding to continues strength franchise. franchise mix

capital model. call XXXX of at cycle questions. to Our With over we our like for ensure emphasis highlights business full end we'd your liquidity and to the the and that flexibility on to prudence continued operator the a strong to manage position will the turn company and continue

Operator

from Dowling Partners. Thank first you. Humphrey [Operator with Instructions] question Our Lee comes &

question. You with your may proceed

Humphrey Lee

lower? of for that questions. first it may is my that question and I I plan like the Is of $XXX guess move thank of taking any guess thinking into change for million regarding kind to upstream you or my there how market plan morning to kind XXXX. you anything any higher dividend think conditions Good that about

Ed Spehar

Hey good morning Humphrey. Ed. It's

analysis a outcomes think dividend scenario on plans, when market about considering our that's So the we it's potential for based credit. and

capacity. on So dividend it isn't based

$XXX million the right take see this would the So for year well you that in and number I outlook $XXX year a that's that be with XXXX back total million we more below I million and BLIC as I as the indicated said approximately it's believe $XXX is think number normal call. about that had consistent for capacity to as I on think and actual March

Humphrey Lee

Eric. more Okay. of a question philosophical then Thank And guess you. I for

in think been same years for back not the businesses of VA well been transactions to and this that looking markets some time is seen executing past it's think couple even the some that I or for evident the are seen public via it. have of proper definitely about talking ascribing peers of have I but marketplace at or them by the valuation your a we some

I really the you at the your does guess the to Brighthouse on look and right don't more risk north sitting now now, company you XX% cap extra think need the don't do something I point right market excess value? on think transformational that of is capital a transfer necessarily unlock I what is have to based answer of capital since right what

Eric Steigerwalt

of as to along we Humphrey. had amount a morning all a and We've times you look new and that unlock flowing Conor outflows and rationalize expenses has sheet. we're good all repurchase thing how Good on are stock, frankly off the balance we've executing a a net strategy, that fair Thanks sell capital, see business many said our business of right? the as for old doing discussed books. can is strategy

strategy is almost years. think in repurchase common we've of So your mean but question I stock last we valuation able working. our couple XX% been that of the understand about I this to

very franchise the off anything it but and taking really X.X that. think proud times a and I'm culmination I'm not going this not two it quite many off saw of table we're sort the this things. one, consider and repeated I I've the we Number If take we this work, would table. years might of anything of created strategy the some So is we've over strategy that past to transaction

see our can You sales.

able almost You will and of off exercise which sales repurchase the we our time. positive a in the value pay been and XX% can is quarter think we've creating to fourth see company over

might strategy. to years? couple liability changes to that the you the a with where over on want happened that's respect we've Conor So mention sheet maybe our come have balance

Conor Murphy

Humphrey. Hi Sure.

So Shield about X% in only when terms that's in-force of the separate to and a mix, of as entity in-force significant our the of a the become component has composition became points and clearly reminder through Shield XXXX. grown we by XX represented a

XXXX, the the from X the another over and look gone we we'll at between to XXXX XX horizon about in expect as And to refer it's intensive intensive. XX% points with of end the that the to what kind intensive X block business end same maybe now and shift in now the by actually to So VA as amount near-term XX%. decrease and non-capital continue of coming in the change down capital and the is X that next we such capital about Shields pretty approximately we up to

leave XX% book. intensive is fixed would with of remaining about XX% us then the the that Now non-capital the and

shift the So right with that every a about really talked in and day. line that's significant happening we've progress

Ed Spehar

just Hey things. a add Ed. Humphrey it’s couple I

strong our markets cash strategy acceptance block the a of attractiveness all the risk supported is we prudent of view capital affect how financial deal. strategy and and that of by First capital position a does

we capital from I block focused our think capital we thing business a second on VA are deal. The and substantial have say without I would releasing is, released

BLIC substantial quarter the de-risk charts attrition with the the year example VA capital referring to to in the related to $X addition up with from able strategy natural which is de-risking every we Conor our of year. we're And free For block. dividend of pie were that we last for in-force early last as hedge took allowed billion

Humphrey Lee

Appreciate but appreciate the I since wrong separation color the really you've I very been think feedback. do anyway and don't well me get the executing Thanks.

Operator

Thank you.

with next Our Ryan comes from KBW. Krueger question

may You with proceed question. your

Ryan Krueger

target Hey you a billion the smaller I'm and the $X.X authorization. execute It's good a understand do trying are surprisingly. morning. lower Are the signal this the a of not potentially approach guess where that get buyback not target. on billion then different to taking to and last I authorizations buyback hit to I may year? you the size them you looking you re-up wouldn't or is this question but $X.X authorizations than had couple

Eric Steigerwalt

Thanks It's it seems the a signal not signal. in signal a Ryan. it's become a not like is of some but reports it

So let things me a couple say about it.

billion of First XXX did XXX a so the in one race don't and be ourselves XXX to all have then with we we to XXX want like something with does naturally dollars then in of be a When February the next XXX the was change or last pretty we that. freed that big did capital. strategy that conjunction about in a up hedging like

in could to any got but sort a see done number nexus it's go we little can of it is thought have nice bit we like case you there on a well of ways current okay So there you this one. and the

do XXX would here. to like and I'll then Let's off. it just I stay right another finish

still it said I that I have all goal now. goal a hit want to certainly We hit I've along want to and

in not it's hope comments signal a ourselves. no, with kind sense than about So of being it not makes other any I race my

Ryan Krueger

on the in earnings appreciate statutory any and low Ed, you anticipate it detail environment. roughly guess does. on positive Can I or current on environment? breakeven in would for pressured rate comment I expectation statutory is interest you earnings that give some this being then your more your that? Thanks normalized

Ed Spehar

Good Ryan. Yes. morning

understand stat market results it's the by earnings fourth the This non-VA did because all as positive to result we of I was fourth in environment. weak have composition earnings mortality. quarter were driven first results the offset norm a important slightly the VA and good think quarter So for primarily of by

we have quarter. the did have elevated mortality you in fourth and I think that others noticed

the just quarter. challenging would strength that of in of I results the VA So quarter because don't fourth see say mortality underlying the you the

for give that you forecast not for when earnings to Looking March. an a not update forward outlook ‘XX in to tables call say distributable or but business stat a would earnings going I we're do the get we're which norm going

stat scenarios the level but to on drive I We release at still are mean you'll planning have an expect earnings. rates so some based while we show think I they're XK some tables on the low able a pressure up, distributable rates to come we be norm sensitivities earnings would in around ‘XX

Ryan Krueger

Got it. you. Thank

Operator

Thank you.

Evercore. question next from with comes Gallagher Our Tom

You may question. proceed with your

Tom Gallagher

morning. Good

Just a Ryan's Ed. on question follow up

the you throughout to since build for that, intention flattish target an RBC your just RBC to does about to So get say or you're you're expect thinking sort a you down draw XXXX drawing down you're in capital want earn RBC? that would would time dividend thus take the maintain potentially expecting RBC way would equal year? that RBC to you all to BLIC meaning buffer of here Is from $XXX I million you the or your amount expect contemplate be expect it would should to being? or like things keeping that XXX the of to above we understand, the around the

Ed Spehar

mean, XXX% the market to range XXX%. want that Hi. to I in be would of in Good time a I Tom. normal the environment guess I we over would morning say

fair we we from that gives that not target but XXX% I bad things to time can want So start done say that that a I RBC to and for know for don't we want I year number mean think cushion us over to don't to plan specific work which that it's significant give happen XXX% believe end. I now time time. have absorb to to doing that of would to to range we the

Tom Gallagher

I Got XXX is cash target of guess, think Eric Holdco your thinking the I now about the million. And level Holdco it.

target. with That'll market the given thinking doing It's amount are you're sizable this cash. first that considering three] to sizeable billion intention valuation to over use with on to the cap a above current buybacks still for elephant here are significant the room up from is uses above here cushion the buybacks you I your that mean simply be at about seems keep relative just [a other in how point. the year. it what more or are It's this I you for that? leave like the so commitment just guess and You're dividing BLIC you

Eric Steigerwalt

we got we're it the Tom. I Look we've morning. little are but how look global still a words times thinking flexibility in Yes. we're many pandemic. said and overdoing it Maybe a this bit prudent

answered are. rates We're this comfortable, We're etc. but RBC same where answer and with your sure of taken. in see Over proud would time way thrilled ourselves this would point franchise kind we just well very to down. of with distributors You Over they're come time we that that question we question. that the and to want it. expect want is Ed number to protect the find I we make situation your

future. with to number targets Now when shareholders that to announce of buybacks that certainly going over a about with anything to expect I think but return that the come road so bit really is you like little you but X.X I'm that in respect time not the what would map we down. do time that like what I to and to to today or any a new we've far I'd flexibility over respect allows billion done obviously

Tom Gallagher

share just share sorry, where then one that repurchase thinking aside it or today, based on from follow-up the are stock repurchase? you you is be and anything is thinking a Okay just would no-brainer

Eric Steigerwalt

value. think this and a about Look and the referring to may obviously and think keeping in the we about whatever mean to is be phrase consider have but our add you anything? think to continue want have how these I prudence today had That's to we'll of these dividend. with we we've say that's you one announce would things we'll we nothing help how Ed discussions create with I could discussions shareholder I board. flexibility. Obviously this.

Ed Spehar

Yes.

I Just shareholders. would out to is shown to one capital here obviously return thing a we've substantial willingness just point

than date separation time buyback outstanding value XX% obviously since substantial price number. our our program think continue to the we a business taken time have shift is we of given inception pointed franchise, we mix. grow prove that the the less repurchase sizable to that out greatest is but will Eric the value consider sales shares in importantly our can at a distribution the share is actions we since over supporting can create a to believe As we've $XX so And that to average same decline share create on and we

while tired probably saying the it's we're and do so those and business. two And sheet we're flexibility thing the for right of it's prudence getting continue because balance to all manage to words to with going the

Tom Gallagher

Okay. Thanks guys.

Operator

Thank you.

Our next Sachs. from question goes [indiscernible] with Goldman

You with your may question. proceed

Unidentified Analyst

about light quite the do Good at a talk I'll take was looking sales little quarter in I that a bit expect a up from in sales what XXXX? down be to probably of of that drove Can row. morning why everybody. questions. a curious this the are really annuities, annuity and lower bit you again in second break you just capital quarter deferred those fixed annuities year-over-year or deferred

Conor Murphy

Conor. Yes. Hi, it's

favorable say fourth remained third for quarter the a similar So I to industry. would annuities in the quarter quarter, the fixed maybe

[indiscernible] a fourth offer competitive with think year. [increase] product. the of quarter XX% I compared Obviously the we prior

have a quarter for expense focused We and looking We fourth. decrease reinsurance we lower the obviously a product. decreases good a on third We base beneficial the few the some rate customers agreement. firms A as select in had well. we had, and quarter we but a had had in had rate

fixed as sell expect XXXX. XXXX don't we annuities as to in we did However, in many

Unidentified Analyst

would why be? And that

Conor Murphy

will we that well. impact don't I expect rate Well, the as market The will hot as necessarily. be increases

more and he going in it think lie they're in might our in Myles we terms maybe of to to from perhaps opportunities over come So it turn talk can other I instead. about where are can growth where products the and

Myles Lambert

reiterate and all Conor you Thank Yes. I comments. those

will next our year be growing to our sales. on focus think core as it franchise I relates that annuity business focus our Shield a real is

throughout introduce mid-year the products our with XXXX we've Shield and are year looking of product. continuing with had next our some new momentum products We access sometime flex sale features to the that

Conor Murphy

decreases My third in We Hey decrease just realized rates in and sorry want have had quarter another in I a rate to rate quarter, correct. the fourth had the quarter. change we said increases. I I in rate decrease the may

in part that's to why lower of have expect sales So XXXX. we

Unidentified Analyst

and second we And beyond the unique Should Do in I claims saw it some between question, clarification. the was to quarter then there guess don't it for some mortality Got non-pandemic maybe namely? think the the quarter? you elevated went correlation continue I expect my think elevated thanks to there COVID-XX. first that into the Brighthouse. is pandemic that we and

Ed Spehar

is Ryan, this Hey Ed.

of claims range So may then in in $XXX down normal million closer had claims neighborhood at quarter, if But have to million to say the us million to direct quarter and reinsurance you a we $XXX a that our $XXX $XXX in a million quarter. we let's are the direct the four focus $XXX to on $XXX million of quarter. this million more in typical bring

that's can bounce a around and number about obviously number portion nothing as a talking not meaningful in see volatility on there it and that that movement is earnings. was a that's large frequency and that is that good we This time going So portion a is see from a quarter a that COVID for and time to our systemic. of in we it's we're and just mortality discussed we have of then to impact severity quarterly's

Unidentified Analyst

really checkups get people year is may at and to or carry given think related it know way volatility I to this not guess you of ex-COVID do their uncorrelated maybe expect you that that is into any whatever which it XQ swing could or I'm still you trying therefore I to pandemic? quarter. as the any that some be would see do what of volatility Right. getting

Ed Spehar

don't that We Yes. indication impact a see here. any COVID related there's

Unidentified Analyst

Got it. the answers. Thanks for

Operator

you. Thank

Our next question goes Wells from Elyse Greenspan Fargo. with

You your question. may proceed with

Elyse Greenspan

Hi, thanks. first that to the dividend guys Ed Good morning. expect My on one you take.

be to capital we from we you expect dividend I'm place? conservatism share on the in to and $XXX maybe this given given So timing year. then should expect if more the it the the taking to just the there interested weighted should timing that pointed the with the flexibility takes especially buybacks when repurchase million of BLIC Holdco timing

Ed Spehar

the pace commit don't Good way would timing really the of buyback in say think the the to considering dividend I amount of We're share or of cash and of influence that the timing I our at BLIC to dividend any going morning any have specific I timing Elyse. holding company. guess not would that on the we

Elyse Greenspan

expenses That's I is there's quarter. helpful the cost of of bit else said kind some on operating run that just there the and was the typical my off your then seemed question one the know little within anything quarterly maybe just second elevated Was Okay. a in or quarter. of in you heavier that in kind it seasonality operating expenses fourth quarter? fourth and

Ed Spehar

Yes.

to this probably Okay a mortality. I what think makes trying minute together here so maybe it I on gotten help to spend question pull know we've sense all because of a

answer more of expenses to know in things and of there's and run a that we're number if okay. expenses addresses question this can of global on maybe kind interest a I Now bit including that's a I make that rate so

Elyse Greenspan

would Yes. be That great.

Ed Spehar

Okay.

returns in our was to strong I neighborhood in normal already would we would was really income think favorable quarter discussed around we as quarterly quarter. a $X said of run probably thought EPS that of a relative look If a share. say. investment share it's net had $X $X.XX drove to rate quarter and what fourth last to be very our a neighborhood the let's we've that alternative consider we And investment at the that So share still the I and a I that continue

at driver that the to million that million normal you I $XXX of was the direct benefit claims which alts. unfavorable the $XXX from around roughly had underwriting $XXX closer discussed had level in mortality If as the to the the total the overall million we the primary being offset we versus in look quarter

to full the there's items other for not the an relative those related is And a to When pointed make So the run out. quarter have up expenses maybe a less share, would of a portion at And I half I rest want fourth higher you'd the the fourth two in final in to fourth at tax favorable to out then we we're identified being that looking we impact each somewhat that good than be expenses the that think it is for cancel be of year the atypical of in elevated $X.XX market the as the rate the rate. quarter. adjustment did quarter. it's true level

that So up of balance bigger out earnings period a true of driven the this tax impact. adjustment impacted be that I It think favorable fourth would line was and you saw quarter by market that the the was roughly corporate and adjustment other this loss.

up the So impact. tax the expenses you they roughly and offset true favorable market if these put together

it If the at alts. roughly you underwriting look offsets

of to quarter. So per say as would share you're back kind a I $X normal

Elyse Greenspan

helpful. Okay. Thanks for That's the color.

Operator

you. Thank

comes Barclays. from Our next with Benguigui Tracy question

with may You your proceed question.

Tracy Benguigui

Thank AFG be broadly looks and marketing kind of with morning. suite. distribution remind and Life us more yours should we them your Good Insurance the It’s for could thinking business on in their acquisition product you dependence relationship How also of about of you. purposes? like light of if MassMutual you have level upcoming

Myles Lambert

Yes. Sure. speaking. Myles It's Good morning.

we meaningful their other ours support best they portion grow to and continue sales. to we with I certainly and relationship at advisors, mean friends transaction. to with well focus of our MassMutual channels there pleased So as remain a at ability represent continue firms but our MassMutual with be will very overall our distribution our other smaller this new our do partnership of we wish their

Tracy Benguigui

and we more of offering Shield And didn't could if and riders color is comments I on I'm have Okay. when sales recorder stick talking we and the the made just topic earlier on MYGA wondering Shield. if be that annuity the the by driven maybe some were I'm about you annuities sales were just case fixed seemed the in fixed Myles, of of and to I'll GLB provide market to that. crowded. that appetite types more just maybe product like a for bit if that some product becoming you'd comment other wondering little side you guess as be features or adding about the your on

Myles Lambert

start fix was fixed our XX% our business came the with so XX% product product. product our And from on XX% of five-year was business. product and about Roughly three-year the MVA that our I'll deferred

about last to it we of it. right space market now year obviously competition it that in best of good with as share there's Shield our Brighthouse As our a as was lot quarter relates quarter The relates fourth feel to really sales. Shield

still the and So mid-year. launch will which of we features to on through our that to competitive want sometime we believe is we're include very believe what kind product we're working going product

Tracy Benguigui

characterization risk trying from capital intensive you move are would to it the but Okay change since away business.

Eric Steigerwalt

Conor I'll take one. that let you

Conor Murphy

core Shield to Yes. pleased I returns may the and continue product so would on core would that expect be we our we products and our of enhancements a do will look, all bit our to say add are we I it maintaining continue product by little expectations will in product while say with of the well. will and as and on is tweak economics the a terms it but we

Tracy Benguigui

Okay. Thank you.

Operator

you. Thank

question comes Kligerman Credit next Our Suisse. with Andrew from

You question. your with may proceed

Andrew Kligerman

the it's mentioned in it's or know call Ed thanks. year for positive project normalized negative I XXX a Hey that didn't quarter this Good want slightly to and the earnings little in is metric. Brighthouse you the a but zero earlier for and morning. stat one Maybe you

you capital us XXX your million total number kind just are was fact dividend. maybe subsidiary it normalized a I'm with adjusted $XXX a maybe give sense could and million reconciling up curious So that staggerings then a the that like despite of there of what to

Ed Spehar

Okay Andrew.

one we'll start first back get me question first help. the I'll to come second your to a but with answer more maybe than satisfying the for the one is the try Let one second because question. you'll

and me VA will total explanation past you RBC than adjusted see capital heard reform. you ratio as convergence in about see you've for will the talk and why in the under and So divergence an more volatility

total the as quarter things for to your is you XX you increase took And asset an when think total things as tail CTE adjusted, scenarios the and move doesn't so bad fourth which reserves we impacts So get TAC. that sequentially $XXX reason for requirement it which tend much. million being happen of in have opposite a of is ratio the quarter CTE a however in at the set dividend. occurs The tax based they saw $XXX reflected type on and it very good happen. your about when though is RBC markets that of good a even XX million and more The

one The figure that at XX stat change reserves we earnings to applies CTE level remember in the is to at movement more stability concept more based of earnings adjustments norm total norm key change have in XX. whereas CTE the will you on the CTE asset the same XX. TAC replace requirement So in move to get in as a with stat

surprising play have So norm the it's the number don't norm see considering in well. earnings change and link the not between we TAC as that you at fact the stat earnings this in divergence that stat

over say Going about earnings a like by thinking talk your earnings easier norm and scenarios. is it distributable what question, to multi-year about is back figure it to thinking about period would different stat so I first under and

about our as I we're to earnings. for is distributable business time will annual norm and continue It by you and be maybe to earnings now to different we market relatively the we norm get a tables can and we be in XX you take is for will generation release earnings distributable stability of distributable more suggest period but that a would we bit to volatile multi-year earnings It's think scenarios what over there our I over stat the the a mix you patient norm within CTE what but out going look multi-year shift that see time under earnings and a stat those we're you CTE think time sense earnings. to CTE at would norm the And giving just some give that because if obviously will earnings period capital period. stat something distributable tied about norm XX short you'll just a because could give matters expect is you it looking So little above expectation for stat of being but above over an figures RBC to earnings stat should you scenarios is think March that how not concept different distributable when X.

Andrew Kligerman

fixed look Conor quarter That and and I'll you follow-up and annuities different on and those rate helpful did Conor's maybe a fourth in the rates. where lowering comments for products where where and annuity there are fixed general were the just Great. the early sensitivities quick it the rates? bring was in about then was but

Conor Murphy

were were into yes. the We in broadly range we closer the give to products but range a after rate the various coming in we a I'll general quarter above change have we're you lengths X% sense. X.X% various and speaking the and

Andrew Kligerman

Interesting. lot. Thanks a

Operator

you. Thank

from comes question Research. Erik Autonomous next with Bass Our

with may proceed your You question.

Erik Bass

Myles go back thank don't I I to think the in sales and BlackRock outlook to want you. mentioned discussion. annuities the Hi, you product your

expect So start to of that just more or opportunity? material is term see to you a sales XXXX something is that wondering that longer in

Conor Murphy

well as with Conor take them. to to bullish the of category one. obviously for I'll that opportunity It's obviously but very-very very excited it's take closely Americans and and about for on It's the them Yes, bit BlackRock. remained a going a time. actually. us product new taking so BlackRock help We're working how their we're with lead little going it's but

longer we we little here about bit talked likely haven't actually are that the well. the don't, of do sort expectations what a financial and So we won't as for

on So Thank one. tuned that you. stay

Erik Bass

Got you for and Conor. maybe you other one it. one Thank

to lapse I have think VA older in you the normalize. block started mentioned trends that

that So a you on bit touch maybe if little could more.

Conor Murphy

our Sure. it QX consistent much would very with actually. describe Yes. like Honestly, looked I being very as expectations QX

consistent. around billion very So number terms in the of composition $X is the that outflows

withdrawals half partial annuities. a being of percent it debts full about of about So a it and couple being third of withdrawals, XX%

I XXXX expect and our So as would well. say into heading really expectation that's normal pretty

So we see. will

Erik Bass

Got you. it. Thank

Operator

you. Thank

Barnidge John from comes question next with Piper Sandler. Our

You may your question. proceed with

John Barnidge

Thanks.

what been you of the at sales so question, Can year in time a as to partners? ‘XX of more ago, you about about and how you've sense through to went distribution can get MassMutual percent distribution a compared maybe them. better wanting the back building distribute spend XQ, greater through versus than to talk Going MassMutual we of just talked

Myles Lambert

launched on firms of lot, done we we've it's contribution as expanding product lot as within both Myles mean FIA secure I million new IMO a six product pandemic. done the macro given categories far pleased bringing a a really and into environment new with with Yes. again. We've and successfully channel certain about year the results were year sales XXX advantage we of our this traditional

years remain said So over a a and our of as MassMutual consistent of ago few I the distribution sales network is but MassMutual and been represents moments outside few them a wholesaling growing very portion that's the smaller same last our the they to and provide sales dedicated provide still important level there of to continue is relationship grow them ours. in focus our We of to future. support and

John Barnidge

Is today? it a sales of majority

Myles Lambert

overall our of sales Majority today, no.

John Barnidge

Okay. Thank you.

Operator

Thank you.

question next Our Gallagher comes from Tom Evercore. with

You may with your proceed question.

Tom Gallagher

Thanks.

quarter million quick life claims the $XXX what The number? gross net Ed, just a this Just was follow-up. of

Ed Spehar

I $XXX was Hey $XXX $XXX between and million million, It was million. $XXX It million believe something. Tom.

Tom Gallagher

because Okay reinsurance you're anything, was to and just that because relative was retaining meaningful or participation that like is relative normally normal? XX% unfavorable just that's there it's more delta a

Ed Spehar

will mean around have normal where is big and reinsurance Yes. on It's that I nothing other than it's coverage we move we not. every we direct percentage this reinsurance have where and believe quarter number based claims mortality.

So it's those that two elements see. combined that creates volatility the we

Tom Gallagher

Okay. All Thanks. right.

Operator

you. Thanks

with next Our Kamath comes question Citi. from Suneet

question. with may your You proceed

Suneet Kamath

and level sales? if protect Is capital that your out around message morning. ratings the Good that's heard you getting Eric to if of think were generate your Just you higher higher right. you'd of a in that be what is I about a talked then Thanks. I goals sort around Yes. perhaps your were franchise if wondering there? distribution able ratings one a of it opening your comments to

Eric Steigerwalt

they're It and just distributors board. sort Suneet. hard Hey good fantastic for overall the really look work where really. we No, across morning, not just, our was an of they're partners

and sheet working new etc. but on them was products, there they no in helps it So a other message no balance see when that. strong us

Suneet Kamath

strain get of guess forward, that couple in life teens been mid I Got if sales of to assuming then you the of the have kind we going I'm sales want about your think sort past and quarters. it higher. here for

about from inflows. I you annuities and outflows talked think flipping

going where a us the your lines want earnings sense So going XXXX? don't if those know can to excess relative sales just along of that's benchmark like you a sort in of strain you something see if be of to wondering or I but use give on kind it to capital?

Ed Spehar

Yes. Ed. Hi It's Suneet.

think recall would expect will, impact. I the but we and last gave would to last strain had a we some different figures what discuss DE when the We we of it's time if willing talked than tables that gave DE would I around year. about meaningfully of related I wouldn't story year indication topic say we be generally a you the the be

Suneet Kamath

did you having say put a when DE it you're you tables? Got and call out

Ed Spehar

having as not it call. will obviously in and an answer to we going aside set to to questions a are we No, out then put We're time XK can. as your many we of

Suneet Kamath

it. Got

Thanks. Okay.

Operator

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

David Rosenbaum

a All joining Brighthouse you and your you in right thank interest for and you for your have great Josh all today questions day. thank Financial I hope for us and

Operator

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

You connect. not may just

Brighthouse Financial (BHF) 11 Feb 212020 Q4 Earnings call transcript