BHF

• Capital-focused strategic initiatives: Made progress on simplifying and revising hedging strategy for in-force variable annuity and first-generation Shield books. Estimated combined RBC ratio was between 405% and 425% in the second quarter, within target range. - Sales results: Strong sales in annuities and life insurance, with annuity sales at $2.6 billion and life insurance sales at $33 million in Q2. - Expense management: Second quarter corporate expenses were $202 million on a pretax basis. - Shareholder return: $43 million of common stock repurchases in the second quarter, year-to-date repurchases at $102 million, with $441 million capacity remaining under share repurchase program. - Financial and risk management: Maintained strong capital and liquidity position, with holding company liquid assets over $900 million as of June 30.

• Continue to execute on capital-focused strategic initiatives, including completing the transition to revised hedging strategy for VA and Shield businesses by the end of September. - Adjusted earnings in the second quarter were $198 million or $3.43 per share, driven by lower alternative investment income and lower underwriting margin. - Progress on capital-focused initiatives, such as fully transitioning to hedging new Shield sales and entire Shield business with living benefit feature at year-end 2024, and making progress on separate hedging strategy for in-force variable annuity and first-generation Shield annuity block.

In the second quarter, Annuities segment had adjusted earnings of $332 million. Life segment reported an adjusted loss of $26 million. Run-off segment had an adjusted loss of $83 million. Corporate and Other segment had an adjusted loss of $25 million. Total annuity sales were $2.6 billion, a 16% sequential increase and 8% year-over-year increase. Shield sales totaled $1.9 billion in the quarter, year-to-date Shield sales at $3.9 billion. Life insurance sales in the second quarter were $33 million, contributing to record year-to-date life insurance sales of $69 million, an increase of approximately 21% compared with the same period in 2024. Holding company liquid assets were over $900 million as of June 30.

• Market volatility impact on statutory balance sheet under adverse market scenarios. - Uncertainties related to actuarial reviews and their potential impact on financial results. - Risks associated with reinsurance and its impact on underwriting margin and capital position.

Q: Around your actuarial review for 3Q, 4Q, is there a risk on the stat side, in particular, that there could be a charge given the continued losses? Or do you see that more about volatility and less about asset adequacy?

A: As of now, there's nothing to report on the actuarial review yet. We're in the process of doing the work. The actuarial review timeline for stat versus GAAP has varied in the past, and currently, we'll have the stat review on an annuity basis in the fourth quarter and GAAP review in the third quarter.

Q: On buybacks, are buybacks are part of your normal plan going forward? And should we assume that you'd continue into 3Q? Or is there any reason to stop to preserve capital or anything else?

A: We have historically repurchased pursuant to 10b5-1 plans. The Board is comfortable with that. The 10b5-1 plan ran out at the end of May, and we'll see. Historically, we have been a returner of capital.

Q: On the whole discussion of M&A, comment on your confidence in the company's ability to sort of survive and thrive on a stand-alone basis. Like do you feel you have the capital flexibility, the product breadth?

A: With respect to our legacy liabilities, we're in the process of transitioning our hedging strategy and will be done with that transition at the end of September. Our distribution franchise is strong, we continue to innovate with products, our technology is state-of-the-art, and we have good operational capabilities. We're pleased with our situation with product development, technology, operations, and distribution partners.

Q: On Shield, sales this quarter were down for the first time in the last couple of years. What is the reason for the slowdown?

A: There's a lot of competition in the marketplace. But generally, we remain pleased with where we're at. We continue to hit our targets. We're a market leader in this category, growing off a big base, and we maintain pricing discipline.

Q: On the unassigned surplus in BLIC at the end of the first quarter, and whether still expect to take cash out over the planning period as discussed on the last call?

A: The stat income statement doesn't give a complete picture as it doesn't take into account unrealized gains on our hedging program. The unassigned funds are a technical consideration, not fundamental. We have good relationships with regulators and will convey to them if we think we have the level of capital to take money out, and our 3-year financial plan assumes we will take dividends.

Q: On annuity companies focused on spread-based products, thoughts on Bermuda captives and alternative asset management partners?

A: Historically, we've used reinsurance which gives similar benefits to a Bermuda captive. We're always looking to effectively utilize our capital base. We partner with third-party reinsurers and have a significant captive in BRCD which gives capital efficiency. We're thinking about ways to upgrade and utilize capital effectively.

Q: TAC increased modestly in 2Q '25, with S&P 500 up more than 10% point-to-point. How much did the additional hedging actions earlier in 2025 benefit?

A: The RBC ratio was down sequentially due to seasonality of capital charges for new business and adverse results in non-VA. The VA business had a normalized statutory loss but had a muted impact on the RBC ratio due to divergence in reserves and total asset requirement in a strong market. The $400 million of normalized statutory losses was not very meaningful in this particular quarter in terms of impact on RBC ratio.

Q: Appetite to continue to lean into sales after a pretty strong quarter in 2Q?

A: We don't have any changes right now with respect to how we're operating from a new business perspective, and we're having a very nice third quarter so far.

Q: On the assumption viewpoint and auditors considering findings from independent actuarial reviews in rumored sales process?

A: We don't comment on rumors and speculation.

Q: On C4 charges and glide path, and RBC decline if stat results are 0?

A: The C4 charge has a seasonal benefit in the first quarter and builds over the year with fixed business. We don't provide an overall projection of the RBC ratio.

Q: On capital in the Delaware Reinsurance Company and disclosures for valuation?

A: We disclose information in the K on BRCD related to surplus and can figure out approximate level of credit-linked notes. We look at cash flow testing scenarios and consider margins under different scenarios, and don't see an excess capital number in that entity as a source of valuation boost.

Q: On the change in hedging, are there implications for the balance sheet on day 1?

A: The hedging changes are not like start with a blank sheet of paper. We continue to run the company to protect the statutory balance sheet under adverse market scenarios. Revisions on rate hedges are along the curve, and on the equity side, the delta position is not changing that much. The change is linked to the current rate environment and is not as big externally as it might sound internally but has been a lot of work internally.

Q: On long-term free cash flow projections, are you guys going to be in a position to provide your long-term free cash flow projections this year?

A: We need to complete several initiatives before providing an outlook for future results, and the outlook for future results is not likely to be in 2025.

Q: On claims severity heightened in both Life and Run-off, unpack the experience in the quarter?

A: Severity was approximately 18% higher than normal level, with impacts on Life and Run-off in a 2/3-1/3 ratio. Mortality fluctuates quarter-to-quarter with considerations of frequency, severity, and reinsurance offset.