BHF - Earnings call transcript Q4 2021 | Brighthouse Financial, Inc.

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Operator

Good morning, ladies and gentlemen and welcome to Brighthouse Financial’s Fourth Quarter and Full Year 2021 Earnings Conference Call. My name is Shannon and I will be your coordinator today. [Operator Instructions] As a reminder, the conference is being recorded for replay purposes. Also, we ask that you refrain from using cell phones, speakerphones or headsets during the question-and-answer portion of today’s call. I would now like to turn the presentation over to Dana Amante, Head of Investor Relations. Ms. proceed. may you Amante,

Dana Amante

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

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

the discussions open Also management. will up members we for today period. remarks, prepared our senior question-and-answer call here to a Following of participate are us with in the other

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

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

Eric Steigerwalt

XXXX I and remain pandemic, you, share in am target the thank resulting our strategy Dana. the COVID-XX year on Thanks for milestones Brighthouse us. we our Financial. for our tremendous many focused XXXX, achieved joining Despite all you strategic customers, that and shareholders. pleased and end we partners returning was employees, and Thank steadfastly another on shareholders everyone to challenges for including: to the we mission Good strong $X.X from important billion of our dedication delivering the of accomplished by XXXX. to of our morning,

includes in shares we a XX% As public a of relative company end outstanding have common an million that outstanding we stock $XXX repurchased when That to year our became the result, we to shares in reduction XXXX. independent reduced number of XX%. of of by relative representing XXXX XXXX,

Access. flagship The ahead Life both we year a sales in steadily throughout our resulting sales in and annuity annuities FlexChoice year strong Level annuities insurance variable record grew and the XXXX, balance holding optimize Brighthouse consisting to capital from annuities of further first and primarily the In and both life $XXX pay of Insurance Life million subsidiary totaling company, strengthen sheet dividends statutory million of XXXX. quarters our in quarter, for were ordinary expectations. to our total continued throughout with year. continue three fourth the to each the very or sales strong $XXX delivered of were Company, We the sales the of Sales Shield record of insurance BLIC.

to we support clients continue distribution the professionals the enhance and serve. footprint way and our financial We expand they

to added year, addition new During Simon our of Marketplace. the the the including relationships, we distribution annuities

expense and out launched which margin Shield out more spread insurance wholesalers, life time. the SmartCare. BGA business and business, reduction Level We enhancements our enhance channel simultaneously our margin more into We startup distribution firms, selectively or rolled our will added annuities also SmartCare first diversify spread brokerage post-separation making institutional general We rolled our strategic we the fund year profile over expanded growth. to to in agency, run-rate relative investments the and almost XXXX to of and to future earnings expect institutional achieved while XX%

investments distributors as and operations technology implement our finally, our to major future these we us financial provide to we our as better And allowed as and and support of well completed holders. conversion platform. Some platform to professionals efforts contract our a policyholders their state continue

and to we our capital, RBC approximately and liquidity XXX%. combined robust risk-based the fourth balance our results, sheet position fourth or ratio estimate quarter Turning was remained in our quarter

Brighthouse and as ended annuity the Shield driven expected. the and quarter XXXX. combined. we sales sales XX% in product VA sales billion delivered with of Annuity sales Total holding were quarter. Additionally, with results were year $X.X up sales assets fourth were rate Shield of the billion. Fixed fourth lower compared strong $X.X billion quarter-over-quarter variable of liquid company $X by annuity

rate mentioned I we As the interest in second previously, have half environment. given actions took low the of XXXX repricing

in approximately compared life fourth quarter third increase quarter sales quarter of the Additionally, the compared an and with XXXX. of an of the million increase XXXX, we of XX% $XX insurance XXXX XXX% fourth generated with of of

of growth results in bringing XXXX, additional sales As is wholesalers. I distribution including insurance our We more life life result insurance last on said, partners be strategy, our execution which and with the a we year. focus pleased and sales in new delivered of on addition couldn’t steady the

our like to on expenses, do would to of and thank clients behalf moving our Before for distribution customers, partners they everyday. their I all

I XXXX. with million year fourth full which do the quarter $XXX quarter. am $XX in of include to approximately not Corporate were expenses. results turning Now, Establishment pleased the before and establishment the both were costs costs, fourth before for tax expenses, million tax.

progress focused significant to on well-positioned strategy to we in XXXX. and we remain continue made execute XXXX our have believe We in

and RBC XXX% in We continue statutory target normal of to prudently capital XXX% manage between and markets. ratio combined a

will In addition, evolve continue more mix new adding business. by to high-quality our business

flow of less higher and business. capital-intensive to expect with runoff more mix our business business, continued a less we cash We generating see as profitable time older, coupled over add in shift profile the

our life help one remain of we products, new of enhance solution develop lifetime reach, very retirement. ones millions across being continued excited distribution expand about expect selected and annuity And we see we to insurance. that existing As their annuities sales growth workers an provide our deliver access two income is BlackRock’s investment throughout with LifePath to providers designed American simplified Paycheck, to to and

We down and corporate expenses our we manage statutory expenses to have over expense to significantly reduced drive continue to plan ratio effectively time.

exit transition operations implement and we of prudently continue manage will future platform. we agreements the state remaining our services Additionally, as the to technology

occur expect remaining XXXX. to in We establishment the costs

XXXX. to on repurchased To commitment X our significant $XX continue we this Brighthouse through have intend to ongoing deliver Year-to-date our of year, our up, wrap Lastly, February common progress we to million of shareholders. return made to capital Financial in stock.

that strategy. continue of We strategy in focused the we place to we believe right remain our and and well to have the execution continue positioned

Brighthouse diversified Ed evolves call a turn results. to more include and to discuss shareholder Ed? that, mix, driving I consistently the franchise grows are over will to we As business committed to financial the Financial value. With

Ed Spehar

is year, XXX%, strengthened rates holding quarter above in end our at by well combined Thank total estimated Eric. was XXXX. XXX% capital, results combined $XXX the an market markets RBC everyone. of equity strong for the explained the XXX% risk-based XXX%. We and ratio you, our further capital with Statutory from ratio full higher target RBC billion decrease XXXX fourth morning, year. and backdrop quarter. or approximately Good performance billion normal adjusted Favorable company December XX. XX or Brighthouse of a with The balance sheet the to and positive ended ordinary and dividends September TAC, provided compared to interest $X.X reported of the of year subsidiary for range approximately combined of year Financial million paid up the in at $X.X

favorable from $XXX increase and helped equity rising interest year-over-year, at drive rates year Looking TAC end markets in million a XXXX.

$XXX was our the year. holding operating companies XXXX to the in than dividends total plan more double Insurance ordinary Life ordinary initial BLIC, XXXX, for Additionally, paid dividend of Brighthouse paid total The Company, or company. in last million

quarter. Turning was statutory the to earnings, metric fourth breakeven close to this normalized in

statutory was a the to by reversion rates interest in $XXX and mean for year, approximately loss million. VA a For variable than in million the normalized a negative statutory annuity from core non-VA. full the offset $XXX point or $XXX loss results more decline were impact Strong million

give discussed on I As indication of to our statutory to performance capital bad earnings an last excess good generation the in normal meant managing in is markets. earnings to call, normalized measure risk and markets

senior $XXX notes approximately approximately company were of $X.X December align ratio. with Importantly, used prior from holding the of of debt excess The company VA VA reform. extending $X.X took indicator to $XXX to were operating company net is $XXX issued is XX, and XX. We billion the capital. repurchase generation more we earnings form was proceeds indicator Also, this movement historically million in of to the fixed-for-life of quarter, notes level, preferred over billion normalized low better reform costs are million year, important in time. XX adoption believe ratio other assets statutory best an at fourth with RBC of by capital. maturity weighted and of September company that Starting senior this redefining Cash average at and the At equity therefore the we RBC excess its capital maturities the a XX-year million stock. Holding measure liquid in of advantage current at funding holding preferred up adding years. we introduced the

certain remains million, we evaluate ordinary holding billion earnings, plans dividend manage total with noble million. to same the XXXX million dividends we to using third of items, holding balance company. adjusted As the fourth XXXX, ordinary the XXXX, to we In pay the look subsidiary sheet adjusted quarter basis company earnings is liquidity and excluding of and Shifting earnings when of $X.X to associated the expect The conversions currently fourth the fourth of an recaptures priority continue million approximately compares company quarter capacity were in on to items the multi-scenario with the top actuarial a the refinements repayment with subsidiary to a in million, other debt which dividend we framework our notable $XXX quarter and $XX approximately $XXX on multiyear earnings $XXX to earnings, impact future capital, a strength state adjusted million and repurchase to $XXX from segment, assumptions in $XX the including two the associated key Corporate items, in unfavorable think quarter included in adjusted senior Other establishment systems the adjusted There after-tax are with expectation. compared were: reinsurance net valuation expense the transition $XX notes; platform. and results and and basis & costs million company’s to about of actuarial Run-off corporate of themes quarterly XXXX.

it sequentially, in $XXX an the X.X% million after-tax to lower still alternate was First, basis. on approximately a while quarterly was expectation investment run-rate income net return. was primarily very above due investment investment a fourth Net quarter strong income

investment the asset full to was return year, which XX% the alternative For return greatly we the XX.X%, class. X% anticipate for this annual exceeded

pre-tax quarter of of by factors, was variability driven to fluctuations underwriting sequentially. Second, in offset million which margin, frequency including the and the the throughout net $XX underwriting of claims of claims from in the claims, number year, related is fourth reinsurance. included There COVID-XX, margin severity lower a

claims. higher average communicated, million. we end at volume previously range were the of between In on that direct claims as to we a basis a higher have we $XXX quarter, $XXX of and expect million fourth the we quarterly As experienced direct

Moving results market result both offset to deferred annuity earnings, the items, DAC the On results This a smaller in adjusted favorable and adjusted quarter. at adjusted lower driven were excluding were $X were level, tax Corporate expenses. in sequential results and in Run-off mentioned Sequentially, costs, Other and & true-up. of net by items, benefit had notable million of notable reflect a reserves higher $XX Life segment, in reflect margin earnings, the were offset lower previously million a Sequentially, true-up quarter. of items and Other partially expenses. the a fees higher underwriting reported margin, was of driven earnings performance $XXX lower earnings underwriting acquisition or the the excluding lower Corporate by results in increase an lower in tax segment annuity items, amortization a that adjusted in higher lower & the loss, Adjusted segment. income, income, a notable a by as The the basis, was segment notable Sequentially, million. million excluding and tax investment the investment net quarter. excluding quarter. $X

XXXX distributable earnings to I’m year plan and the I quarter update in March Before prior we we have that would Overall, pleased to in as full mention I years. provide conclude, like on results. an with very done

continued amount strengthen to of questions. balance call With a turn sheet the and shareholders. capital the return to the optimize for like to your we capital, to We operator statutory would that, substantial over

Operator

Thank first Our Tom you. [Operator Evercore. from with question Gallagher Instructions] comes

Your line is open.

Tom Gallagher

Good morning.

First, you mention quarter, done capital the generation into I mean negative a $XXX $XXX like million quarter? million Was I true-up Ed, that Was to that just in on a question quarter? heard adjustment. think done rate reversion this this

Ed Spehar

morning, good the Hi, had first No, quarter the Tom. last year. impact in that of was we

So what norm the adjustments statutory fourth a you’re in is basis. talking quarter, think, about on I

the me earnings in the talk actuarial give we So other supplement. on a insurance color and norm stat about you little adjustments items line let And when disclosure the it.

we the to quarter, made state in reminder, and platform this standardized movement platform the understand from think actuarial. RBC And multiple fourth future ratio. our is away progress models systems important I valuation In and the as to customized transitioning more a movement valuation substantial one to on it’s in models.

put talking this quarter for more total environment. so quarter for value-added that about busy we The and The three a we’re this, created analysis, around continue were production for better product $XX to time reserves billion. is fully more and a had fourth and flexibility also three control And statutory models create is lines. was will into

line. at So you when thing associated an to conversions, like about actuarial one review of sort for it’s the think product assumption look these

time in you the while versus differences. gone and the model this other the every quarter, through model So the our you’re closely review at do conversion, we third very looking one had model

ratio to result was the the a really fourth sequential you the impact the as and the calculated so RBC quarter, dividends in top a we change the RBC the the transition And on holding see of state. in TAC this, you company. And there up to the impact negative from explains from future on that of this paid

driver the that it’s The if note impact statutory, really quarter. change that’s look in is these positive adjustments say final fourth So of RBC basis year actuarial it on ratio. on full in to for the was a incremental a thing I’d RBC our you this important at

Tom Gallagher

Got it.

So, Ed. that’s helpful,

the numbers million So if to a If denominator equates I of TAC, correct. – directionally these tell me constant. for I that to if RBC XX-point $XXX sound drop, solve million $XXX keeping

the say, drop for actually, your dividend the than less So RBC. in the accounted of clearly drop the majority a little in RBC of half or

$X.X And I on so million would then you conversion stack several this been RBC was it would there have in is systems would assuming of hundred upwards your the that I magnitude mean level or of of capital have dollars, negative had impact it of like. RBC, adjustment the calculating appreciated. quarter, billion in a order help any be generation normal kind sounds

Ed Spehar

right, Remember, statutory call, review impact. was RBC And quarter that Yes. I positive, XX the I a on That’s our I actuarial a think impact say adjustments the this. Because year points. would high. positive basis. of on It’s discussed said billion third not – something $X.X the total from just around assumption was impact by for the actuarial I stat

think was RBC points. I it XX

for as I can could it’s positive think to much like quarter, the in of we use been still you – there a year. could about have I must anchor the if if an think say negative fourth how impact that full

Tom Gallagher

it. Got

I of when about just of there totally large are any Okay. get this, the adjustments How conversions it, left where follow-up these And be then next here? could you years? systems any further are a think to there left couple – but many

Ed Spehar

Yes.

going transformation, this have to which occur year. we VA So is the

that’s it for So actuarial.

Tom Gallagher

Okay.

I big – VA, how or one is when hear is how it dimension Thanks. assume but I and a that little really bit? maybe a – that – So

Ed Spehar

Yes. say I term, one. an how don’t approved using big would know a actuarially to I diminish. it’s

I completed lot already. that to here fair an we’ve think with awful we’ve that that, the say. learned probably conversions is along But model the way

total, been very will transformation we standpoint we’re think of said, on I awful here, think have significant. very like full see So happens. front. But well XXXX, an and obviously, don’t not – the here, positioned, capital have positive I activity we’re about lot talking for from movements actuarial when that I I we’re had year what and In again, well to a we the positioned

Tom Gallagher

Thanks. it. Got

Operator

Thank you.

Our with comes next question Benguigui Barclays. from Tracy

open. line is Your

Tracy Benguigui

you’re In once it not past, morning. X% be average you the or well around stuff hand, that, would X% your of at X%. as may volume last Good at the say, back I an other But look referenced if the quarters, cheap buying two stock daily was. as But on trading so. to I above

still or capacity, changed behind targeting that? you your range expanded on X% you RBC ordinary X% thinking your are cushion? and I’m this So healthy liquidity holdco your also your to coupling have dividend

Eric Steigerwalt

mic work. Eric. it’s My Tracy, Hi, didn’t

Tracy Benguigui

Hi.

Eric Steigerwalt

we we just couple out me at not has of on and let all. the laid changed laser Look, by a focused are start that saying strategy years that out ago,

So going will you’re and dividend to Ed here jump going get to capacity. forward, do sense in what of we’re trying a on

returned a we you’re as aware. have over million $XXX to authorization. capital We have And very shareholders, lot well of still buyback of

I authorization, carry we in today fair any say intend either the think when out it’s time the get or to buyback buyback. we to future,

are price more back roughly buying we Yes, And for XXXX, it’s X%, slightly as is we still X%. you think the accounted than mentioning are X% result, so Now stock In higher. I stock. that. a undervalued. to We understand

far in XXXX. You what see back we bought so

not this, it. in say XXXX $XX sounds reasonable I’ll guide. to was is XX% an of we I around X%, know course, while say opportunity more. share. of X%, at bought back I there even shares a We time but to Ed our excludes exact wanted any purchase guess X%, XXXX, a to X% going that that think And number, and So an like it I’m give in

what So intend gives to I think what just on add. all a you I some you Ed, know good to of do I – want said forward. we going guidance

Ed Spehar

Tracy, in target the the and how past only The back daily we buying a quoted thing reason and volume. sense is Hi, today those we Yes. of have much give we that active I add would we’re don’t just a how of percentage is average to you statistics are.

we take back our I it’s really declined And active. shares – year. separated. we’ve bought changing. I our back bought seriously, of We’ve very XX% and Obviously, our outstanding we XX% we strategy, as XX% we and shares have outstanding – very think said, since strategy Eric last been So capital see return by don’t

Tracy Benguigui

it. Got

Ed Spehar

sorry, I’m Sorry, what question, you if could was – had another know you I repeat just that.

Tracy Benguigui

X%. I No, earnings you be is, you to the distributable think provide question we you’re should second expect I particularly then treasury scenarios. my mentioned question. it is more positive, to directionally first refresh And in March, of But sitting answered my your above guess going XX-year now a given

the think X.XX% year, not stat last earlier as earnings? XXXX shared really assumptions you about said is or you comparable normalized I redefining at it what because of was year-end of

Ed Spehar

that factor of excess meaningful I the in as really the ratio, generation. say I here. stat I be over change best the a is the going to said, RBC are definition And wouldn’t ratio. is norm indicator capital Well, stat aligning of norm earnings the time mean, we with RBC

think a level. at earnings, strong holding maintaining we we operating still about company up when while the distributable capital the what position think about can we company so pay to And

of we’re last the say did March. are to what I’m that they higher I to it of clearly, a interest were give time. going we are than not terms in mean – In preview we happy when sorry, rates going

Tracy Benguigui

reform, VA while. Okay. considering it’s bit little early that been I you adopted a mean just capital so

were So thinking almost year. basis it like about that’s because same-store last you it’s how

basis, should fair? is that same it the be So on

Ed Spehar

same Sorry, be basis? what on should the

Tracy Benguigui

your derivative excess being view RBC? Viewing of some – distributable of capital

Ed Spehar

at the asking, looking distributable what of to I and you’re Yes, the scenarios, I’m can not VA not the still at capital I for operating various we’re pay mean, up we holding you guess company XXX% under for but me this. disclosures company. – let I’m try support company sure we what appropriate the level and give When earnings

think changed year in in about in said, today reform nothing’s that So VA today. ago ago year as place because, we versus a of terms how a and you place was it’s

Tracy Benguigui

big looking CTEXX. earnings, under And difference be I under at Yes. think the you’re you definition, I RBC, would that at were your guess normalized looking CTEXX.

would versus just a your that make be to if year? want we to I in just So wanted make I March sure disclosure similar, this assumptions comparison, shared the last

Ed Spehar

have Yes, I you’re don’t going a think to problem.

Tracy Benguigui

Okay, thank you for confirming.

Operator

you. Thank

from is Ryan Krueger Our next KBW. with question

is line open. Your

Ryan Krueger

where $XXX the expect rate based the first good basis in $XXX rates quarter Hi, now, XX still million? down come is version And you morning. points would if of million to XXXX? are a right meaner Ed on to so, impact

Ed Spehar

Yes and yes.

Ryan Krueger

guess, your fair just down the work to XXX% there the RBC to That you holdco, cushion? with point, to – secondly, this easy. closer high you – within Would then dividend at your more guess your dividends additional to XXX% I And subs capital was the subsidiary the at amount Alright. a point, or consider, are is just the is target above some take stack on starting the I of to run target. still towards end of a looking

Ed Spehar

Yes.

say cash company, lot the at most holding of obviously, ratio non-dividend a late high of by in I last billion covered So the charges have debt would the been from the year. did XXXX, just a of which, I way, holding $X.X our capital our companies company. first And of cash with reduced than with flows transactions to more and we we guess operating maturity fixed RBC by the has by and because XX%

preferred and issued a life of the XX-year XXXX. and for fixed debt, we most debt it $XXX that took out So of million in shorter of combination

even is amount low point for a up small. where imagine, preferred as means that’s that’s fair also debt It that from on amount less at our I there mean, coming you in were XXXX, yields locked time. funding us. in the We maturing that can historically So they the – we’re very in happy. is cost are

anywhere, you’ve any from over based ability BLIC say really to two, taking so without not framework. at look a multiyear as I heard complete we me number point on don’t – dividends the on, the mean, time. have I one. authorization this reliance repeatedly, in that’s number certainly multi-scenario Point we So dividends

what’s we’re up a going dividend year. but take that’s And any have so of to going lot drive it’s in to to capacity, great us X what to determine not

Ryan Krueger

That makes Thanks, sense. Ed.

Operator

Thank you.

Our next comes Goldman question Scott from Alex with Sachs.

Your line is open.

Alex Scott

Hi, to I And a through you I changes taking the made? us I just on annuities. of for the that transforming the comments of that generator, thanks scenario about are that are wanted So for is circle that? question. about changes kind talk what – entails? Just Could What platform you mean, could the back guess switch? dimensify variable specifically on one the that the that occur help some any platform of where

Ed Spehar

is in scenario generator. no change There Yes. the

to process. There discussions think Obviously, which I very a around – it’s to we’re of long a for I going new be the engaged. to you referring to think scenario the be are work is statutory, generator do. is going a lot

in you VA concerned regulators reform. As complicated. time. to manage can the good extremely am I got we’ve just that not change industry and say, it’s through I’d And imagine, can look, capital. take a proven we We’ve going to of about a will And come really optimistic ESG. lot framework. the the I’m And it’s

single now, our for the terms and of as we’re have multiple going – I VA, that in there we products. just all place systems said, I say a are environment In to, of would that are

up does more It I and to think provide, simplification. provide people of do does time it for the So, value-added analysis. frees ease use

realize. to know if and result don’t benefits transformation that fully So, – would is I this there I really going into forward VA the we system. opportunities go of to completing am the as the looking a I will completing specific we are on But anything have

Alex Scott

it. Got

through into I that take forth, going when flow to scenarios need we cash to not to And forward in and that so March we are so think mean that’s that bring a in or consideration account? really what you should take

Ed Spehar

correct. is That

it into to need take account. not do You

Alex Scott

And from if maybe how next XQ should I find we the you expenses? was? inflation is that any into wanted thinking institutional around for just platform that in out investments shed just are maybe how my you much follow-up, could and the expect impact to guys on of And there year any light about

Ed Spehar

suggest Well, I we would assume Inflation linkage inflation. translates that’s a inflation about. on is will certainly And people us. and not the same. will industries, deal to start rates, higher have of. we obviously, inflation higher would market do that inflation for to guy something wage to to which good have afraid are is yesterday’s think an I interest with rates, that we interest all if across reasonable overall say But higher action

Eric Steigerwalt

Eric. it’s I will add to that. Yes,

continuing talking inflation. I might any time over of here, to sort down you us go can think So, count ratio our expense respect on stat to about despite with effects that hit us

about Certainly expense about specifically spread a for time, for and in long for have a it’s it’s – the margin new a did some sales us, down. been business XXXX, you that. up ratio I business. of This And institutional should growth think Brighthouse. start margin expansion asked we think particular the but You coming we stat as expect we business year continued

I in and was running million-ish up And anyway. get XXXX. neighborhood $XX didn’t in it but course, ask right. That of will that them question, the to all So, that $XX it And higher. this made answer million-ish expenses, you affected of our

So, our of XXXX. to million we another $XXX save and then had expense originally sort of starting in set base $XX million out

continue spread we the two will margin year, do in which hit about we that was institutional half this not difference investing business, and to did reasons. we One, So, that then did distribution. of the for and a of lot

probably in XXXX still your comments we that will expense well and ratio. on as You with in our will inflation, see And XXXX. stat lower along

helps. I hope So, that

Alex Scott

you. Thank

Operator

Thank you.

Greenspan Our Elyse Fargo. from question Wells next comes with

Your line is open.

Elyse Greenspan

goes as interpret capital to you assuming for – would to than thoughts earlier, dividend, guys but price question Thanks. But expensive where someone return, was, pointed would given opposed for I more am I morning. capital back though out it am assuming repurchase updated I I where still guess. is My you had stock any look of Good first even return there? I think share your you a obviously instituting your is,

Eric Steigerwalt

Yes, good assumption. a I think that’s

Elyse Greenspan

Okay. question, And you earnings there? quarter. any then give color a the of in us that just guys had second you my additional Thanks. you Could reinsurance pulled recapture out

Ed Spehar

Elyse. Sure. Yes. Hi

increase, GAAP recapture the in meaningful had basis. In total of million included not a had was from the items net number. unfavorable $XX reinsurance million, which So, statutory are a unfavorable the it And I impact $XX a we sense recaptures impact And think, impact the a or the makes a on to basis, that to do when accept rate this the sense with we know, that made instance, latter. decided we presented evaluate business. recapture to as it you in just whether

Elyse Greenspan

you. Thank Okay.

Operator

Thank you.

next comes from John question Piper with Our Sandler. Barnidge

line open. is Your

John Barnidge

Maybe approach company talk totally do years to hybrid other how companies ‘XX, you. quickly. about if are digitize able opportunities? Thank a future end up with set in X to understand and world, you expense programs cost-cutting you after have close announced we very rightsizing cost establishment your in to start heavily But it

Eric Steigerwalt

Hi John.

to think we expenses. – take is out We room some will still there – I for us

ago. the by We number of You mentioned a way. while, it’s started years the digitization, a this taken

can number here it’s coming have take a preclude question, investments rents But obviously, shy is going will will But So, some to our from out, said after think a here. of over There now, still twice ratio. are never inflation as I going years. we finally expenses where stat some also, previous we away in I from not be areas factor. to making It a time some us, fruition expense to growth. from lowering maybe be

LPP for We have investments product. made the BlackRock

we you will this the for And that next sort products, year. of investments continue financial with. We we have will which our – year work in and we digitization made will professionals new see

there to So, opportunities. I well. be are as going pretty frankly, on and growth investing focused in am growth But

John Barnidge

Can you. in of That’s added previously. much. quarter last talk of the my success you very the performance very and you XX,XXX to maybe agents XX,XXX helpful. new agents you quarter, well? then those new recruitment Thank you as in follow-up, Thank had And agents about

Myles Lambert

speaking. Myles Yes. Lambert Hi, it’s

to I fall you XX,XXX brought August access approximately throughout and giving about specifically We think are last we – of channel. additional and growth on new fall, also and relationships, XX the throughout did are new new into the summer for and starting we us BGA SmartCare referencing I So, several our launch distribution distributors year. and happened, product it new see we like in that to slowly advisors, the opportunities. And distribution from those opportunity some the expanded said, from

John Barnidge

you. Thank

Operator

Thank you.

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

Your is line open.

Humphrey Lee

thank and taking you morning question. Good for my

expectations. if claims, the is a taking your to and we looking look compare mortality do for kind relative claims, to there to maybe, But definitely six quarters reinsurance Just and step the the say, downs at are up where recoveries, the quarters. the of direct past and quarters at you back ups over end four

Ed Spehar

Yes. it’s Hi Humphrey, Ed.

think there we is out I yes, that talk about, little been that’s underwriting direct explains favorable less has case obviously, to COVID also that. and knock-on be in And normal. prove part that the hospital we So we where what go than be pointed quick of I that the go is And right, consider believe of think was pandemic. a imperfect. impact have to generally We the you aren’t but to the cause quick as don’t the effect a as to there can people and that we could emergency room. the know here, death this, aren’t reporting to I

minimum COVID identify because the So, number know categorized that possibly of COVID-related others to be, are the as what And that, deaths, COVID. correctly. tagged deaths that that are not there I say, we are we are deaths has as would

it’s be pandemic something our for that is think quarter, generally change talked us. an I the had how I difficult that our mortality not that about say what’s experience not. third little we what’s this about based I precise in to issue studies. and expectations on would is So, in really very

third assumption heavy of analysis issue. our quarter update this So, actuarial

a at lighter $XXX some the see. We million lot the percentage It themselves. of bounce fact volatility around of can direct the be I it. we continue to to you what average. Reinsurance gives claims than you a was quarter The little and type that $XXX million the range look consider give can this indication to would of

years. probably I that’s there here, a X there I nothing impact is to or last pandemic somewhat So, would think year the is of say affected but see

Humphrey Lee

to think used shield market of the through of terms thumb guidance to product mix for rule some to impacts color. about can you as just think GMIBs, impact? you My the the Thank how shift the I related continues think to But like from in your market is legacy us in Okay. running question updated annuities? give an you past. second to about of to how kind provide the

Ed Spehar

Sure.

specific So, a impact. not we market are identifying

we as an if that it slightly qualitatively about as we rate. you you market are we was look to, think talked impact about I less underwriting when well at offset expenses run favorable that – if thinking said say, the that the issue

you the million. I this look Annuities quarter, DAC the believe, at was If $XX segment,

Now an conversions has the systems that that from talked impact about. we

is DAC actually benefit. a So, there

where a for was DAC. positive negative So, unlike impact, was impact of because there statutory GAAP the there

the the adjusted like run more in DAC $XXX in in the million. the related I a normal probably And that of in is annuities So, past DAC neighborhood was more said million. $XX number million for if quarter rate you adjust or that, for have to amortization the to earnings for quarter $XX

higher say number it’s I than it’s that to fair that a think now.

about give that you So, impact. some the think market indication how of should to

Humphrey Lee

Got it. Thank that. for you

Operator

you. Thank

question Our Autonomous next Bass from with comes Research. Erik

open. is line Your

Erik Bass

with cash the Hi. certainly, send base sustainability value could flow. shareholder of to argue not common dividend Thank stock, confidence Elyse’s expand well, strong potentially you. a a I dividend. buying wanted the your to and it’s your that potential follow-up back question, of your hard on a in signal And

how thoughts in little more just are bit getting that? a So, on thinking you about interested

Eric Steigerwalt

is This today. you Look, But Hi microphone topic never us a a this Board is common us is possibility play a am problems for topic this as think we about words at discuss Erik. And and a like it’s the talk is I well. is is time, Well, it. right not I team, point, certainly, we strikes I hinted will – a about we that as say right Does both eventually our should be that that I there formally, that And dividend, And certainly, there we a buying go. will as Board. it over talking no, this. management But and not. way were preclude think more it to I being, kind when used probably for of dividend. stock and will the now. the time buying return a as about a a capital good having still with back back it this does stock assumption

Erik Bass

modestly you. equity versus seen relative you I should update in could markets. so. or on the the positive just still is provide flows know have we but you? will Thank And Got environment hoping kind was rates, we it. to something sensitivity you then obviously as of rates have a we interest month cash think VA I us for declining of like a higher year-to-date, an if And net of that markets remind

Ed Spehar

took this very the XXX of But basis ago market Erik, about remember, not we here was then out of going that the to very the talked equity was it’s was, had specifics And same X would $X the the point to of The down because our Yes. well. rates last of am the tables we look, similar performed interest get year, adjusted right. for DE the years come – additional into had the billion strategy, did making de-risking capital I a thing hedge point points. I that down how DEs is I out tables. year like It the our – I prior at looked ahead we only time, DE when lot.

indication both important, an So, it they gave are you right. that

Erik Bass

Certainly. Yes.

Operator

you. Thank

comes Zaremski question Wolfe with Mike next Research. Our from

Your line is open.

Mike Zaremski

Friday. Hi, great. Happy

normal comment is evolved markets. you target, markets? normal And over of has one talk quarters? what can your ratio Just question, you on RBC view about Maybe your you it recent when used the word

Ed Spehar

to a won’t about to Mike, does Eric that be a surprise having exactly few just to XXX% me right, sort RBC feel to ratio say the We question. – Happy during maybe just mean, of because feels this you. a like guide answer – for is It’s hand cycle lasts waved us XXX% a markets like an Friday ever. doesn’t right a the probably it of on to normal normal, And it were that discuss what basis. the full kind for to number it

And that. certainly, to so you got you times expect above be really And if be are times would expect that. when below to would it tough, good, it

until have good you a done very market So, has I think stock now going seeing very the we want not much. sure are rates recently, had here. that’s too. I Interest rates, make we you to why run – But that well. so are up, positioned mean

terms company know too get now you think of don’t that I So, operating capitalization about in level. time your to at aggressive is the how the

Mike Zaremski

Thank Understood. you.

Operator

the Thank you. for Dana will Amante now call Ladies and gentlemen, to over closing turn I remarks.

Dana Amante

thank and you Thank us for today your and a interest for Have great you, Financial. Shannon, all joining day. Brighthouse in

Operator

you concludes today’s conference Thank participating. call. for This

now may disconnect. You

Brighthouse Financial (BHF) 11 Feb 222021 Q4 Earnings call transcript