Shares of Corebridge Financial, Inc. CRBG lost 2.4% since it reported third-quarter 2024 results on Nov. 4, 2024. The quarterly results were hurt by an elevated expense level, a decline in Life Insurance premiums and deposits and lower guaranteed investment contract deposits. Group Retirement also saw a drop in spread income, weighing on segment profitability. Nevertheless, the downside was partly offset by robust fixed annuity deposits and improved investment income.
CRBG reported third-quarter 2024 operating earnings per share of $1.38, which beat the Zacks Consensus Estimate by 18%. The bottom line climbed 31% year over year.
Adjusted revenues improved 11.1% year over year to $4.5 billion. However, the top line fell short of the consensus mark by 20.8%.
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Corebridge Financial, Inc. Price, Consensus and EPS Surprise
Corebridge Financial, Inc. Price, Consensus and EPS Surprise
Corebridge Financial, Inc. price-consensus-eps-surprise-chart | Corebridge Financial, Inc. Quote
Quarterly Operational Update of CRBG
Premiums and deposits were $9.6 billion, which grew 5% year over year. Premiums and deposits, excluding transactional activity, advanced 20% year over year on the back of growing fixed annuity deposits.
Net investment income improved 24% year over year to $3.3 billion, attributable to increased base portfolio income.
Total benefits and expenses of $3.5 billion increased 6.2% year over year due to higher policyholder benefits, interest credited to policyholder account balances and advisory fee expenses.
Corebridge’s adjusted pre-tax operating income climbed 27% year over year to $1 billion in the third quarter.
Adjusted return on average equity of 14.7% improved 330 basis points (bps) year over year.
Segmental Performance of CRBG
Individual Retirement
The segment recorded premiums and deposits of $5.5 billion in the third quarter, which surged 40% year over year on the back of higher fixed annuity deposits. Fee income advanced 11.1% year over year to $321 million.
Spread income of $729 million rose 8.5% year over year. The unit’s adjusted pre-tax operating income grew 14% year over year to $657 million, higher than the Zacks Consensus Estimate of $628.7 million. The metric was aided by growing variable investment income, fee income and base spread income.
Group Retirement
Premiums and deposits advanced 7% year over year to $2 billion in the segment, attributable to increased in-plan and out-of-plan deposits. Fee income of $201 million improved 11.7% year over year .
Spread income fell 15.8% year over year to $176 million. Adjusted pre-tax operating income was $188 million, which slipped 2% year over year due to a decline in base spread income. The metric also missed the consensus mark of $189.1 million.
Life Insurance
The unit’s premiums and deposits of $856 million fell 21.1% year over year. Adjusted pre-tax operating income climbed 15% year over year to $156 million on the back of relatively favorable mortality experience. The metric came higher than the Zacks Consensus Estimate of $95.9 million.
Institutional Markets
Premiums and deposits plunged 44% year over year to $1.3 billion due to reduced deposits from guaranteed investment contracts. Fee income declined marginally year over year to $15 million.
Spread income of $133 million surged 90% year over year. The segment recorded an adjusted pre-tax operating income of $154 million, which more than doubled year over year on the back of improved base spread income and variable investment income. The metric beat the consensus mark of $112.6 million.
Corporate and Other
The unit incurred an adjusted pre-tax operating loss of $124 million, narrower than the year-ago quarter’s loss of $166 million on the back of the sale of a legacy investment and reduced corporate expenses.
Corebridge’s Financial Position (as of Sept. 30, 2024)
Corebridge exited the third quarter with a cash balance of $530 million, which declined 13.4% from the 2023-end level. Total investments of $250.4 billion advanced 7.7% from the figure at 2023-end.
Total assets of $399.4 billion increased 5.3% from the 2023-end figure.
Long-term debt amounted to $9.9 billion, up 8.2% from the figure as of Dec. 31, 2023.
Total equity improved 14.3% from the 2023-end level to $14.4 billion.
Adjusted book value per share was $37.32, which slipped 2.4% year over year.
CRBG’s Share Repurchase & Dividend Update
Corebridge bought back 25.9 million common shares worth $715 million in the third quarter. It also paid out quarterly dividends of $133 million.
CRBG’s Zacks Rank
Corebridge currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Insurers
Of the insurance industry players that have reported third-quarter 2024 results so far, the bottom-line results of AXIS Capital Holdings Limited AXS, Chubb Limited CB and Arch Capital Group Ltd. ACGL beat the respective Zacks Consensus Estimate.
AXIS Capital posted third-quarter 2024 operating income of $2.71 per share, which beat the Zacks Consensus Estimate by 8.4%. The bottom line increased 16% year over year. Total operating revenues of $1.5 billion beat the consensus estimate by 0.4%. The top line rose 6.2% year over year. Net premiums written increased 27% to $1.2 billion, attributable to a 10% increase in the insurance segment and 189% in the reinsurance segment. Net investment income increased 33% year over year to $205 million.
Pre-tax catastrophe and weather-related losses and net of reinsurance were $78 million. AXIS Capital’s underwriting income of $135.1 million decreased 8% year over year. The combined ratio deteriorated 40 bps to 93.1. The Zacks Consensus Estimate was 94, while our estimate was 93.4. In the Insurance segment, net premiums earned increased 15.6% year over year to $1 billion. Meanwhile, the metric in the Reinsurance unit decreased 21.5% year over year to $342.8 million.
Chubb’s third-quarter core operating income of $5.72 per share beat the Zacks Consensus Estimate by 16%. The bottom line increased 15.6% year over year. Net premiums written improved 5.5% year over year to $13.8 billion. Pre-tax net investment income was $1.5 billion, up 14.7% year over year. Revenues of $15 billion missed the consensus estimate by 1.5% and improved 6.5% year over year.
Property and casualty (P&C) underwriting income was $1.4 billion, up 11.7% year over year. Chubb incurred a pre-tax P&C catastrophe loss, net of reinsurance and including reinstatement premiums, of $765 million, which was wider than the year-ago catastrophe loss of $670 million. The P&C combined ratio improved 70 bps on a year-over-year basis to 87.7%. In the North America Commercial P&C Insurance segment, net premiums written increased 7.2% year over year to $5.5 billion.
Arch Capital reported third-quarter operating income of $1.99 per share, which beat the Zacks Consensus Estimate by 2.6%. The bottom line decreased 13.6% year over year. Gross premiums written improved 20.2% year over year to $5.4 billion. Net premiums written climbed 20.6% year over year to $4 billion. Pre-tax net investment income increased 48.3% year over year to $399 million. Operating revenues of $4.4 billion rose 24.6% year over year. It beat the Zacks Consensus Estimate by 8.1%.
Pre-tax current accident year catastrophic losses, net of reinsurance and reinstatement premiums, were $450 million, wider than a loss of $180 million incurred in the year-ago quarter. Arch Capital’s underwriting income decreased 25.4% year over year to $538 million. The combined ratio deteriorated 870 bps to 86.6. In the Insurance segment, net premiums written climbed 19.6% year over year to $1.8 billion. The unit’s underwriting income of $120 million was 7% lower than the year-ago number.
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