BHF - Earnings call transcript Q2 2022 | Brighthouse Financial, Inc.

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Operator

Good morning, ladies and gentlemen, and welcome to Brighthouse Financial's Second Quarter 2022 Earnings Conference Call. My name is Shannon, and I will be the coordinator today. At this time, all participants are in a listen-only mode.

We will facilitate a question and answer session towards end of 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 over now Amante, put will to the I Relations. [Indiscernible] Dana Investor Head of Ms. you Amante, proceed. may

Dana Amante

our second from section Materials all our Today, and and to Officer; can released Officer. to President be you, morning. review the quarter of Eric website. and Financial's XXXX you and Investor We on Relations you Thank last night materials. earnings our Executive will today's for Spehar, good call. Steigerwalt, found call of hear were these Chief Brighthouse Ed Welcome Financial encourage Chief

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

would this statements. to discussion from differ within I our the laws. federal statements forward-looking may anticipated like call forward-looking include meaning Financial's in that during of the the materially results Brighthouse securities note Before we results may actual begin, the

risks discussed from on today's As the of Exchange update undertakes discussed Information result no Financial's The time Commission. XXXX. U.S. speaks call. information Securities obligation uncertainties only with X, Brighthouse in of any today, call as filings a on company time today's and to and August to described

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

Eric Steigerwalt

you thank quarter morning, Thank earnings everyone, call. you, for and XXXX second joining Dana. Good our

acknowledge our understatement month independent in Brighthouse years. want proud as fifth I operational to I Financial's to that this the and as an a franchise moment It strategic well that an the that our we have five say discussing Before incredibly marks am is as results of over quarter, accomplishments public company. the to built take anniversary past

help one annuities States. and United the areas had achieve to we and deliver time. to From a largest well Brighthouse have insurance over on strategic Although in by people company focused has launched Brighthouse we with we roots and new trusted rich our have back we the as established our customers of million brand build as we mission a distribution the did built security, well heritage retail as through life were financial consistently when relationships. capital the returning an diverse XXXX, by simple to shareholders Financial means as no a tracing providers focus strategy as we Today, three commitment beginning, franchise over with to initiatives to X marketing of our U.S. on as are

over elements These in reflected expense awareness, enabled our effectively and to continuing and ratio our to these as distribution past States. of in set which diverse, of footprint a our time. the the and over build new the aligned focused helped showcase annuities. Our to to we of drive guided with insurance and maintaining made life to our Shield distribution the products increased were annuity an strategy public that our expenses approach a distribution running sales just brand our out have key model strategy, consists our relationships the level and simpler, of focused adviser and expand awareness and business solutions finally, partners brand management advertising they our entering to highlight work are we growth. offering generate results we clients of managing and serve. that strategic the And partners, operating designed our XXXX, target which market hit adopting ground by our footprint. of through our more financial Early has a sales strategy designed accomplishments new set rolled company network accomplishments. well-established years flagship directly campaigns, in us of United suite channels campaigns The our our value a and five of expanding transparent to some distribution managing as instrumental statutory down provides introduce Selling to are Brighthouse our are The in

Our annuity $X since sales led with year doubled end XXXX annuity XXXX, more annuities. and the of total billion, variable sales than full have Shield by exceeding level

product, competitive in our a we Financial reestablished the insurance we In the life launched by product, which in Select presence followed was SmartCare. called with launch in addition, we Brighthouse collaboration In This life insurance Simply our first of Policygenius. term market. XXXX, XXXX

expanded efforts year, had LifePath balances as solution. of investment And Paycheck June in deliver to billion. we in XXXX, to business. And over as $X we our of relationship XX institutional of selected with margin entered BlackRock's XXXX, BlackRock we spread we were Additionally, this join the the

profile diversify We expect enhance this earnings our over to time. and business

increase As made mix initiatives, and predictability and a growth strides earnings seek flows cash to we going continue our of we have as significant towards shifting the of these level to forward. business result

time back further balance allowed our an for holding strategy, common to remain variable release the $X.X began company, company capital, fundamentally annuity Brighthouse significant becoming risk two focused in to a lowered shareholders billion ahead revision, of along our to since continued billion of amount billion we program, amount our years by our approximately $X.X hedging the to of returning returning August of common line, of execute authorization XXXX, target continue that liquid we shareholders repurchased capital. a capital capital consistently as the to assets the we In profile last of our XX. at outstanding over to announced of buy common June have and years. approximately of have on we $X public stock efforts the with the initial of its a As also of of We revised repurchase of shareholders billion we and common optimize reduced stock we capital execute statutory by we which shares have enabled year-end over time. five Through our Financial stock X, and approximately $X independent company's XXXX. of capital profile managing XXXX, to stock on sheet. risk billion XX% achieved returning committed total year. of to And and, statutory our This $X.X to past strategy, our August number optimizing strengthen remain We as our substantial of

our technology accomplished effectively while and platform. strides managing the of all great We this in our have operations to expenses transition making state and future

over on and of to we past we heartfelt we give want have work very to I for all distributors years, our tremendous and achieved all As five whom hard appreciate. the reflect their employees dedication, you all to that a our of much thank

another Amid rose quarter Brighthouse results. quarter second rates our increasing turning quarter turbulent significantly the equity delivered of interest in XX-year have Now this basis with while Treasury market results. almost markets the environment, declined, solid points. to U.S. global XX

the RBC an quarter and combined strong ratio was XXX% Our capitalization with between risk-based in XXX%. estimated capital or

reminder, ratio we to RBC XXX% a and continue an normal As target in XXX% between markets.

$X.X liquid billion. Additionally, the holding company of with we ended approximately at assets the quarter

sales. to Turning

by strong were results this year, in quarter-over-quarter, Shield driven sales Our Total level sequentially the we demonstrates XX% our sales and X% annuity of were deferred annuity our the we annuities. the quarter Through strength XXXX, compared navigate first fixed up annuities the and portfolio continue which annuity current second sales to X% were quarter. product believe of and the results environment. up market effectively as half with diversity of

in to designed stream portfolios clients' level strengthen providing In to of our offering we lifetime a Plus. help am a plan protection participate that Level retirement launch product guaranteed focus enhancing market our to growth Shield end, is with income of announce This product to Shield, by market this pleased against addition, to new generation while To next them we month, portfolio. I volatility. Pay opportunities continue that which is of on combined

the down XX% in and X% approximately generated with we compared quarter, second million Additionally, $XX second of sequentially sales, down of XXXX. quarter insurance the life

intend past to our While the continue we our have in and broaden backdrop experienced life remain distribution some headwinds confident from two our quarters, to the and on strategy footprint. insurance and expand offerings product focused economic in we

me share Finally, the quarter. discuss in let repurchases

and element of and both predictability our X. insurance, and turn enhancing repurchase million on the with million more simple level to continue stock to focused $XX detail. continue business of to and continue and And I'll second which financial each the over execute suite We and additional quarter, Ed? Ed over for earnings the repurchased our life to that, cash our in to $XXX time. to product August with We plan repurchased annuities through will call strategy, our discuss results our flows in shift increase mix common

Ed Spehar

Thank good everyone. you, morning, Eric, and

the we for risk-based an an controlled and uncertainty and Eric, for statutory in delivered level good grew you Despite elevated in sales, our the Brighthouse As an quarter or annuity one was a ratio. RBC economy, market from equity markets second bear heard capital of expenses, Financial. increase

to protected and annuity XXX% between in including Non-VA also first was XXX%, The is normal estimated driven our from were loss the level. range and end to quarter. positioned was ratio of relative first an rates, ratio returning results million. the strong $XXX targeted of primarily variable we benefit interest on XXX% RBC rising a we which combined results to estimated maximum quarter, equities, RBC the the of at as were mortality Our position good increase from XXX% by a VA had or to position increased

Additionally, the was the capital, assets, was in and decrease from combined our investment to compared impact TAC, items portfolio. and reinsurance matter. June $X.X or targeted fund in a admitted DTA, admitted The with benefited total the a was tax ratio or the TAC by reduction in the DTA at nontrendable settlement. the statutory at billion positive Estimated deferred partially XX items, XX. The second billion derisking by in reinsurance decrease growth, two actions RBC $X.X March offset driven adjusted used capital of these from settlement quarter

anticipate second total million discussed earnings which approximately DTA I the still first deferred statutory only is on in during balance is statutory of term. million, tax long conservative. with of normalized tax we statutory the were earnings Year-to-date fraction quarter. $XXX attributes, normalized As statutory using approximately sheet The over a $XXX a our asset accounting earnings quarter for our our call, admitted

our to maximum were I loss As and we interest we mentioned, target. well for conservatively first rising relative rates, on positioned positioned were equities

results In were the non-VA addition, quarter. favorable in

continue the from were holding $X.X operating have substantial cash to XX. the of a company no holding at billion the first assets companies at dividends in amount were We liquid There as of half XXXX. company June

However, company we subsidiary approximately ordinary dividends still taking million $XXX of this to year. the holding anticipate

the new impacting for $XX face million, runoff notable after earnings Level in of costs of life the adjusted from associated quarter the earnings. XXXX $XXX impact earnings, and amount totaled same with agreements $X items, settlement $XX legacy insurance the from a quarter million. included second tax the of million the to quarter of in the reinsurance Adjusted were of our in items to establishment $XXX in large exposure basis Moving XXXX. opportunistically model million first manage and with runoff on compares million annuities; segment; excluding to million adjusted million $XXX for policies, Shield $XXX matter million and refinements Notable which segment, $XXX primarily reinsurance

our balances. run adjusted items, reduction I were would beginning and drivers results average by driven returns relative which negative of market these rate. to account in quarter, XX.X% partially each favorable discuss drove account performance the more in VA's underwriting these quarterly below earnings both with margin, separate to in in detail, a were performance. separate quarter, Excluding market like were the offset by the second expectations, expenses which expected

of and separate is one-thirds income. as quarter after-tax primarily invested driven is an deferred our reduced higher As in as by performance separate quarter cost, This market $XXX approximately was a on change well account second the reminder, equities balances. adjusted VA The in account by acquisition DAC, a fees or lower reserves, invested fixed in two-thirds earnings and on lower million amortization in basis. portfolio

We end in quarter also balances in on second lower separate account fees based a reduction the of at expect third the quarter. the the

expenses tax. amortization after the below Turning were unrelated lower in to along second in driven expenses. DAC corporate Total by expectations expenses with a quarter This variance $XX market. to the was million favorable

first higher also an basis. our margin Claim by higher underwriting million was down and on of $XXX Total the insignificant midpoint expect. $XXX impact volume the The significantly than average sequentially were $X million run quarterly was and in near lower. expectation that COVID-related range relative claims of quarterly quarter Lastly, rate quarter. was claims the from the the after-tax million to was severity typically was claims direct we to

expenses. Adjusted Sequentially, income. level. a excluding and $XX notable lower million. in higher by lower On investment underwriting adjusted quarter. and margin adjusted notable the excluding reflect a items higher life runoff and and excluding higher a lower as strong On underlying The were higher the investment adjusted other to lower expenses, segment benefit results a income, driven $XXX Corporate higher lower an XXXX. higher quarter. lower Adjusted the results the well annuity million were segment, of quarter second net driven the annuities earnings basis, by by earnings, In by and segment at reported items, reserves, had in partially reported earnings sequential by partially of Moving in of in offset results income segment underwriting expenses. partially offset results $XX net expenses. the notable investment a in items, earnings net amortization offset excluding DAC as notable net basis, tax fees higher partially lower were Brighthouse income million investment loss, closing, margin Sequentially, reflect $XX items, were second sequential results offset by million.

to focused Our support franchise. amount would and we the a turn for that, company to framework and managing remain robust, position distribution remain on call a to your under balance our of sheet repurchase the and operator to multiyear, liquidity the we over protect continued like stock. multi-scenario significant questions. common With We

Operator

Instructions] Fargo. first Wells [Operator question Greenspan with Our comes from Elyse

now is line open. Your

Elyse Greenspan

your to My first question relates ULSG block.

your If assumptions review that comment we annual this quarter? provide on you head could could as color your any And there? last coming into you

Ed Spehar

Elyse, it's Ed.

as So And I'd stat stat. of at lot for us about of a GAAP. analysis block charges a us that about very attention we result was And when of worth we start we talk by charges of saying ago, $XX took a have And about about billion stat $X separation. first, no reserves, this stat, ULSG detailed received billion $XX of AXXX. for GAAP years conservative is billion and under from

For just essentially than example, it's lapses And X%. of a lapse reserves. are that zero. block that business. you margins consistently had tell redundant I generally rates historically our as us, ultimate positive testing can been GAAP And for basis, On we've for flow recognized less are cash

Elyse Greenspan

the how the the I guess, do to we're And million that levels then in second of half just ordinary forward that year? expect But given buyback. year. going Ed, that question, the And $XXX of volatile on I my feel in? mentioned second guys dividends you you markets you of buyback typically guys this you guide you Do have level timing take for don't quarterly know about, expected

Ed Spehar

And of certain stick stock second quarter. in to from quarter Yes, that the date. I previous dividends in you past days the bit you advantage just the particularly in price more. where buyback up this would probably being has was little buy to It's or year the noticed it a quarter, with rather we've been third taken of the for and reason from weak quarter when than specific numbers the for the know, which half

when value, very have to we what be pace. the you in look So aggressive been our the we is stepping up stock exceptional if track would I an record, pretty consistent consider at just say,

helpful. not give going the well history so you I And as but the I'm any to be recent guide, think as behavior historical should

Operator

next Our with Barclays. Tracy from question comes Benguigui

line now Your is open.

Tracy Benguigui

your how Let's your types now tend gross for touch in much just pipeline see settlement. these then to of reinsurance every the reinsurance reinsurance of wondering upon these risk We is I'm amount net settlements of still controversies? and

Ed Spehar

Yes.

GAAP an settlement, disclosures impact -- was filings. statutory it we our SEC So matter, contemplated in a results. in was on and this a had our and had contingency reinsurance disputed It

that, $XXX be to to X think see I $XXX million it's million, million. So that X you'll and used million to now range

Tracy Benguigui

actions your elaborate Could on portfolio your you helps also RBC? your in investment derisking that

John Rosenthal

John. Tracy, it's

last over number has Eric of So suggested as more have the macroeconomic both uncertain. months, the outlook, and Ed become

selling markets of So corporate down to the our more in started the portfolio QX portions defensively last by emerging year, and portfolios. high-yield we riskiest position

As economic trades flow. the example, up primarily holdings first second investing single sales, cash reduced about conservatively our for more And this below-investment-grade the through continue by on of quality we uncertainty increased, throughout to category. B quarter, new million, focused the in year we and half in derisk $XXX

where we right feel about we're positioned pretty So now. good

Tracy Benguigui

just scenario? Was that contemplated quick Maybe in there. a earnings follow-up all your distributable

Ed Spehar

Tracy.

let that. on bit So me give a little

us. this of in scenarios, the part answer earnings. that very I is side. when to you the And know tables release back When those didn't our about and see we this we released I a some you from why equity was But So given these and in a we’ve the DE tables. our we that of was RBC ratio markets? that protected And mean, And March back these DE had year of short in no. that entered questions statutory going answer improve on just position happened what others received they is in to the -- the more what cost mid-year the even normalized in year, benefit to

Operator

Erik comes with Our next question Autonomous. Bass from

now is line open. Your

Erik Bass

in decline statutory First, drivers touch on quarter? bit capital you Ed, required the can a this the of little

Ed Spehar

Sure.

I points. the as RBC XX of increased by we our range So -- said, ratio

of that $X.X $X.XX. two $X.XX you that material convergence. would TAC to look drivers. There at decline biggest was were a driver in there you and be at billion, if conclude required capital, we're pretty our would correct. And So was The

convergence the are And determined the heard between the about total see when asset past, the bad, asset CTEXX all reserves at requirement under the talk happens asset which reform XX% total you've in go requirement me than difference by XX. capital at So requirement. markets more CTEXX up you VA is tend total is what to charge and

capital. was that biggest in of so the decline required And the driver

Another driver investment John had was previously. the on derisking the which of portfolio, commented

Erik Bass

where should happens, So how comes guess, level happens? a kind guess a And in is I there the about change when it benefit Or reverses? is there required material think it if play? we And when that convergence into of it this is I benefit capital? a kind headwind of material

Ed Spehar

-- environment don't markets I of for for should I markets. this I most good I I hope at is and about bad happening. think think guess not this look that it's way, it reverse CTEXX -- having you're because XX% would challenging Well, very really mean, the because scenarios a probably say we worse means it some to contemplates very CTEXX things average the likely.

a gets when happen, have in thing bad it you reflected So CTEXX. --

than goes And because more things bad happening. was already contemplating XX so XX up it

And to will should if so a markets have that's what is to The when happen be -- occur particularly opposite you that's strong. environment. why market you something generally see just convergence expect challenging

it again, the X% worse CTEXX you're your less because, bad have of XX. a come worth down contemplate will stuff. average And You talking you'll about have come scenarios doesn't down of at the XX your number lot because

requirement. conservative a pretty at asset So it's always looking

Erik Bass

an if I this the just has for could ask quickly Shield you then on product some sounds like more And It color guarantee. income mentioned. new

the how product risk intensity capital curious the just of profile it's changes that of or So it. the

Unidentified Company Representative

that. is Eric, start this David. with I'll

income next excited iteration the evolution launching the and of are Brighthouse. So of guaranteed of Shield we really week next about that's

strategies. living build is to we're looking and retirement success really said, benefit existing this on feature. for you the income, that those designed adding the we've going as crediting utilizing shield and Shield So a to had built-in there. chassis clients supplement existing And

VA a from really Shield we'll and And our profile rest perspective, risk products. with the be of so hedged

Erik Bass

And in presumably, -- if charge you the the there's guarantee? a additional for separate opt

Unidentified Company Representative

writer have they'll it, That's a with other fees. right. product but attached fee The no

Operator

from John comes with Sandler. Piper question next Barnidge Our

is open. Your now line

John Barnidge

at actually to expenses had -- TSA below Since go-forward expectations you I previously basis? point the the we mentioned generally the last up Are where roll-off roll TSAs of on think most off the could end are expensive. maybe a

Eric Steigerwalt

John, it's Eric.

the below Just part repeat expectations.

what saying expenses, So are you worse?

John Barnidge

better. No, better. I'm talking

Eric Steigerwalt

better. is Expense

Okay.

at So basically the -- year we're we've be years end our this. all platforms of already go-forward near after this of We'll end. of look, seven the

the be already And so already really quite chunks to Those old actually down. seeing are aren't coming fair a you're up expensive. And pieces, ones of amount What's now. the of we're the expensive as next business. some that gotten closed benefit that. of we've left the block going year It's TSAs finishing of

quarters. materially up been But And you're You have how can and in third we're go though last them to even see here. our expenses the down the in probably some see two pretty fourth. going

the end that at state of closed blocks. we're So all the some of go-forward platform future sort after and

Erik Bass

a distribution life talked it. as talk sure others, the then Can and your iteration follow-up, I'm seems maybe are distribution that? My about maybe plans it well. when I ago. for lifetime yesterday of seven times like you believe, outlook you pay Shield gearing any for expansion about, expansion up of annuities level about within like next think seems ahead us, at for you the years But you and And

Myles Lambert

start It's sure. Yes, Pay Plus. Level with I'll Shield Myles.

sell As Shield major we we suite relates now very right number distributors strong it you franchise our national as have through. of that know, a of to products a

So our distribution really feel we good about footprint.

through the Shield look, sell through products And distributors lastly, the our sell Shield, is but also for to current we're well. new looking really footprint as always especially We solid. IMO channel

in we second similar very the third something sell early and did the relates we major our it a brought insurance national quarter, to to in product, life SmartCare quarter. distributor on As expansion again,

of growing advisers that distribution and continued have SmartCare growing for can XXXX product. access ours as to approximately to it through, So we sell relates a and focus we expansion a that's going expanding that be to

Operator

Krueger KBW. next Our with Ryan comes from question

line is open. Your

Ryan Krueger

hedging on equities the any changes us and to fallen? -- have made as risen on and give rates you VA you've hedging the gone any the have year perspective Could

Ed Spehar

Ryan.

So we commented last quarter.

First, the that, rate our the that meaning strategic fact starting a interest been that had out-of-the-money of that a has out we lot strategic and tactical. protection. said component combination I of with of hedging And

protection and low we We The for that's dropping from tactical rates very been levels, rates that very out-of-money going strategic. low, element to said positioned up. have rates benefit have a lot I been was of and to have

on we So remind quarter's just had I'd some taken some we since actions do we that higher. we mentioned were and to call rates this opportunities well. with rates at to associated took continue we on will, some risk that then. manage as last up And perhaps other additional the you you hedge with a because continuum, look that portfolio tell I'll things actions therefore,

Ryan Krueger

market I as to there? same? take the has also it Or equity have largely the chosen off fallen, you guess, protection is any

Ed Spehar

where the want sort are today of into looking forward. I to really don't get we Yes.

time. I'd about over think talk our I rather they as results emerge

Ryan Krueger

more. actuarial the you can just systems Is point? any or us fourth And third then this perspective the can anything guess, in occur I And -- you conversion, quarter? one at the quarter give will that

Ed Spehar

it Yes. I'm sticking be completed will this just with year.

dividends the It's herculean our in It's moving been to we've effort. a that. midst reminder, paying already models of all a one transformation, actuarial As environment. of in been

all the migration. VA, this annuity We standardized In except Shield XXXX, versus XXXX, we multiple and have one Life environments. environment and looking lines, model we we have all models. at of the other more year. did simplified, left VA is We're completed In

year. on And good so very and done this this feel we're track, about I getting

Operator

Instructions] comes Our next with Sachs. Scott [Operator Alex question from Goldman

open. Your line now is

Alex Scott

the on Secure any had I to was you to annuity changes your that what and was time, group in distribute guys made Over you distribution through Act do that over some maybe benefiting more shape? taking of start the First growth? of you time one product sales. I for partnerships channels is

Myles Lambert

Myles. question. is So take I'll that this

And that's actively strategy annuity forward. for huge business it that our moving So it of the look, signing products. hasn't relates is but opportunities to annuity new retirement as But not see sale group relates Paycheck to new be Secure had retail will effect as And business, Act our into a we it terrific plans. flows retirement. institutional legacy for up do LifePath we're a

Alex Scott

there just one realize are former give your that some to any differences and annuities that your you this guys aren't Second prepared parent thinking point. block disclosures is block made the had should annuities at of on LDTI. of their between on of I be about? probably we But

Ed Spehar

Ed. it's Alex,

So opening they sheet correct? I Is believe that balance disclosure. the gave

Alex Scott

That's correct. Yes.

Ed Spehar

Okay.

So points, I right? beginning points that basis was was basis as think. XX of of 'XX, treasury 'XX, And XX-year XX or year-end the

I else, market So with as a would know the out environment you first are thing sensitive very start is we as calculation is risk well and to anyone different rate obviously rate in very benefit as the movements.

talking it thing answer question. previous So to comes to to it that the that's and today, LDTI, really my the is second not the numbers And we're about first thing I would point when out. relates

that the we're model LDTI in calculations stages conversion. Obviously, are VA final doing environment. all We the within of the

on estimates. talk we the premature I position third would it's for would so And us talk it about about call. be to in quarter a expect to that

Alex Scott

of follow-up rating going And think there's goalposts to? one that? is I this? are the result, at? of was, I be you maybe then I thought, What what going noneconomic for kind guess hardest to Like, cetera, are we we going? focused be about mean all where fantastic are are like about very agencies those important. metrics you environment, the a your as this other credit And me. holdco think to looking what pieces, side and managing RBC it load, quick statutory, in which debt on et can lot But How get I on, that of

Ed Spehar

would year-end comments consistent to I think thing anything rating date, to 'XX. talk they X if I cash say look statutory pretty changes to first they've in see. that we'll look sheet you saying that probably agencies, should versus Well, saying their through but you of the our I I And -- through with balance at changes. know, mean, been January is have and accounting Sure. 'XX as they our nothing generation, look the

the the second a first have And the So today. point model GAAP now we have that's is what under we than different point. completely

the would so continue different seem idea be the doesn't completely model likely. and to to have we me that And metrics to same under targets a

Alex Scott

kind like my I of question. That's the Yes. intent is of agree.

are we think should new what about? that So the metrics

Ed Spehar

new Yes, balance the sure sheet, I'm that have. you our we look have, can see the at about you think not preferred debt mean you you I we would see metrics.

capital, don't on. are statutory Those you our I know. see the You mean, things our see cash. I I holding company focus

Operator

next from Gallagher Tom question comes Evercore ISI. Our with

is line Your open. now

Tom Gallagher

in Speaking heard of talk while. cash, your about I target company a haven't you holding

I used to that of $XXX case? still million. changed Or you thinking the that? have think it your Is be

Ed Spehar

the for by in of in and to standpoint, that profile say issued funding for we're XXXX. that a debt like. a your of proceeds Yes. what right? this, ever And It's we say I of think said the and company don't charges. Like, fixed this, the I look position last that guess it's of XX-year life going we I a there would debt in of And dependent most was number. maturity right, preferred cash, extended number right? maturities coming It's holding I've have Because also would I out great But year know I that at I target just is do on costs. absolute fall made don't fixed like due to be given from for those factors. take not $XXX using million

maturity. is XXXX our less think $XXX debt I than So to million now

we now maturities no then. So have and between

added structure more have in extended last years few the We overall the and capital preferred.

having rely about in gives buying really what buyback terms good we of taking of that see So And holding made a the is primary in stock. the authorization second continue flexibility the about I'd remaining you dividends have that our see company have lot the the we from fact of year, see say operating level. you our the to don't $XXX of back that out half very to I've and amount on And that million cash how we're at I comments of cash funding us side. we also feel because -- you kind of company

Tom Gallagher

Ed, while was $XXX have the Yes. out. back might million. your been That a that it But predecessor said

Ed Spehar

Yes.

of said, really it if had due coming million you want example. mean, billion for wouldn't like know to what, think $XXX -- I next I I $X year, you you debt have

Tom Gallagher

want you in about XQ. if for is it's specific are, -- -- -- is, But as result, overall if a and now in the great we My closer think I hearing I'm see first at we dollar follow-up RBC? everything number, hedged million, the you not want just to the going call to but concern an closer near-term XQ, asking positioned. and I where and just to dollar for were hear occurring don't -- hey, I than a point I'm to asking the if talk or you're just looks way but now -- position, on QX to you're how you're not get the dollar have Yes, the this know CTEXX meaningful a understand into I'm least might $XXX close you hedging you that. divergence bear for consequence on in hedge, right program But closer hedging first it, to hit of we we'll heat RBC like marked unintended will and CTEXX market you first market was prospective to your

Ed Spehar

Sure.

to on this. try me help Let

didn't the and -- a of because last see should RBC VA means loss think look generation lend right? can use movement at for RBC had we is the don't the quarter first we and necessarily denominator, would is despite meaning year-to-date, -- and think ratio, call in determine I right? of so saw what you stability terms numerator norm the any it's modeling. million, quarter, So divergence strong convergence say in company, ultimate know to loss. or be it's it's our the a if stat the on $XXX would that last assets opposite right, that of -- environments. first to this. right, And we what at that of up Now I market any VA comment of our forecasting that the outcome. earnings And actually in I above XX, norm ratio, bad made of And results, position just meaning at on the the for XX $XXX and composition would mean different pure you So we the say But that a given or CTEXX a that right? that as wherever it said VA divergence mean, XXX% all have not you million dollar, right, to RBC. going RBC. noise Eric loss. It's that's company for And the first good between we're we're I you look earnings convergence doesn't is based first second statutory XX quarter's the I We RBC, stat models, level, it's an

Tom Gallagher

I assumption, what you're sneak -- referencing you you which [Pru] in our rates, I on that just we quick fine lapse on study Did something one? should assumption. that can sounds the more considering also They mortality said ultimate you're something be is sounds it or that And participate one like in and heard guys like? rate contemplating? And was changed lapse

Ed Spehar

Yes. I very is I just reiterate conservative before. Statutory AXXX. us what under said would for

there I when is about to I prescribed we the are all have flow It's I've assumptions at is on conservative. BRCD, we And repeatedly have the testing margins very good. been You think, capitalization those reason about how said looking think topic. that mean, that's say, that margins. talk And cash at

Operator

Sunnet from comes Jefferies. question next with Kamath Our

Your line is open.

Suneet Kamath

you can me. $XXX you in I million talked Ed, -- about think that's the annuities. impact

and give Any lower kind between fee. think that split the split talked us way on reserves DAC, about I to of that? you VA being

Ed Spehar

I what million, impacts keep is to and the put related you second going I'm slide the the but quarter. Suneet, in at out think $XXX numbers in I help with just can about the were the to all we night it last talked

end to earnings after-tax million were from $XX balances account -- of markets. at probably $XX impact quarter, negative of second another million talk separate about to you the as the would If go-forward the you look impact to

to let's So to then would an there, going $XX you're and million. say -- add got not million to you number you've $XX -- on you're additional have the that,

back, So add not about to wanted million. going something $XXX add right, you're it's full you to be your back, thinking when the if

Suneet Kamath

yesterday, And in talked insurance weaker Lincoln then just life impact the principles-based business to preserving their my their markets RBC. [Indiscernible] due second I about and question think is, that had on an

that all of resides your the smaller captive, any the if if just wondering because that not, impact And sense there? affected quarter? Just or block is in at your in maybe

Ed Spehar

Sure.

the topic what all when a of it's jour] ULSG, So of PBR our ULSG is think I comes none years to [du it started runoff. ago. was in And because of PBR couple

Suneet Kamath

they're the were seemed that referring of but more what to wrong. thought they maybe I to. equity It to I that got referring market, be

Operator

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

Dana Amante

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

Operator

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

may You disconnect. now

Brighthouse Financial (BHF) 5 Aug 222022 Q2 Earnings call transcript