F&G Annuities & Life, Inc. Q4 FY2025 earnings call

• Delivered strong finish to outstanding year with disciplined growth and transition to fee - based, higher margin, less capital - intensive model. - Achieved record AUM before flow reinsurance and retained AUM, driven by strong sales. - High - quality diversified investment portfolio performing well, with stable credit - related impairments. - Made progress toward 2023 Investor Day medium - term financial targets, including AUM growth, ROA and ROE progress. - Owned distribution portfolio performing well with EBITDA generation. - On track to close transaction to sell F&G Life Re Limited, with associated capital recapture and dividend. - Strong capital position with high RBC ratio and commitment to long - term capital targets.

For the full year, core sales including indexed annuities, indexed universal life, and pension risk transfer were $9,000,000,000, and opportunistic sales including MYGA and funding agreements were $5,600,000,000. Record AUM before flow reinsurance was $73,100,000,000, up 12% over year - end 2024, with retained AUM of $57,600,000,000, up 7% over year - end 2024. Fixed income yield was 4.65% in the fourth quarter, up six basis points over 2024. Alternative investment portfolio annualized return was approximately 7% in the fourth quarter, with 40% being equity interests and 60% investment - grade fixed income debt. Net sales retained for full year 2025 were $10,000,000,000, down slightly from 2024.

• Focused on growing core business and delivering long - term shareholder value in 2026. - Primarily aim to increase assets under management through core products. - Expect to further expand ROE excluding significant items. - Move further toward fee - based, higher margin, less capital - intensive business model leveraging industry position.

• Variable investment income with prepayments fluctuating quarter to quarter and potential headwind in 2026 depending on market conditions. - Surrender fees could present quarterly variability, potentially pressuring near - term spreads, with termination flow affecting incremental surrender charge fee income and capital deployment. - Market dynamics and counterparty appetites for reinsurance partners can ebb and flow, requiring management of a suite of partners.

Q: Talk about software exposure in the investment portfolio and overexposure/strength.

A: Software exposure is less than 5% of total portfolio, less than 1% has disruption risk, Blackstone has focused on durable use cases, etc., private equity portfolio has upside.

Q: Near - term outlook for variable investment income.

A: Blended rich on current basis, expect continued mediocre returns, no major change anticipated.

Q: Transaction mentioned, uses of capital.

A: Recaptured part of liabilities, proceeds from sale to be used for sales and growing business, stay disciplined.

Q: Surrender fees and ROE.

A: Surrender fee income expected to be lower in 2026, ROA affected by multiple components, linked to other factors like interest rates.

Q: 15 basis points expense improvement over three years.

A: Expense ratio improvement due to growing AUM and keeping expenses flat, pulling fixed costs down.

Q: Rilla sales trajectory.

A: Happy with Rilla sales, off small base, continue to grow with core products.

Q: FABN slowdown in 4Q and Q1 bounce back.

A: FABN slowdown due to balancing volume and return, Q1 bounce back due to good market conditions, will be market dependent.

Q: MYGA sales and index products pivot.

A: Continue to write MYGA but be more selective, view opportunities better in other products.

Q: Valuation and fee - based business.

A: Stock trading at low book value, have undervalued assets like middle market life insurance and owned distribution, fee - based business earnings contribution expected to grow.