Corebridge Financial (CRBG) Q2 FY26 earnings call: guidance and Q&A

What changed in Q2 that led to softer sales early on but better sales in June for retail annuities?

Marc explained that competitive tension increased in simple annuity designs early in Q2, leading Corebridge to pivot capital deployment towards institutional markets where risk-adjusted returns were more attractive. Conditions improved later in the quarter, with June being the strongest sales month, and momentum continuing into July, suggesting a Q3 rebound for retail sales.

“we saw some additional competitive tension, I would say, in the simple designs... we see ourselves, first and foremost, as judicious capital allocators... we saw more opportunities going into Q2 on the institutional market side, and we took advantage of that.”

asked by Ryan Krueger (KBW) · answered by Marc Costantini

Why no upside to the full-year base spread income guidance despite opportunistic asset repositioning?

Chris reiterated the $2.55 billion guidance, explaining that while there were some improvements this quarter, natural roll-off in the book is expected to cause single-digit compression in spreads over the next couple of quarters, bottoming out at the end of 2026.

“While we did see some improvements in the base spread as the book continues sort of roll on. We would still expect to see some compression in spreads over the next couple of quarters, which we would still expect to bottom out at the end of 2026.”

asked by Ryan Krueger (KBW) · answered by Christopher Filiaggi

Is the growth in institutional spread products a temporary opportunistic move or a bigger, longer-term growth opportunity, especially considering the merger?

Marc confirmed it's a significant long-term opportunity. He noted their GIC book is only 5% of their balance sheet compared to peers at 10-15%, indicating ample runway. The combined balance sheets with Equitable will further enhance their appeal and capacity for such offerings, including PRT.

“our funding [indiscernible] and back business is like 5% or so of our balance sheet. If you look at the environment, a lot of players are -- have been more around 10% to 15%, I think so. So we have a lot of runway and upside there.”

asked by Thomas Gallagher (Evercore ISI) · answered by Marc Costantini

Why is Corebridge guiding to continued challenges in alternatives for H2, unlike other companies expecting improvement?

Marc clarified that alternatives are less than 3% of their balance sheet. Lisa Longino added that Q2 underperformance was driven by marks on PE funds, with broad market weakness and a large backlog of PE exits. While positive returns are possible, they don't expect to hit long-term expectations this year due to geopolitical uncertainty and AI valuation impacts.

“in this quarter, the marks on our PE funds drove the underperformance... the market was weaker all around. The large backlog of PE exits in existing investments have not been meaningfully reduced.”

asked by Suneet Kamath (Jefferies) · answered by Lisa Longino

Given strong capital generation and stock trading, would Corebridge consider exceeding the $350 million H2 buyback to utilize excess capital?

Chris stated they have $1.4 billion in holdco liquidity beyond 12-month needs but remain committed to the $350 million H2 buyback in line with pre-merger plans. He noted significant repurchases in FY25-FY26 and indicated that the combined company's $4 billion cash generation would provide an opportunity to revisit capital deployment at the Investor Day.

“we're doing about $1.4 billion of capital at the holdco that is in excess of our 12-month needs. But at this point, we remain committed to approximately $350 million of share repurchases during the year, in line with our premerger plans.”

asked by Joel Hurwitz (Dowling & Partners) · answered by Christopher Filiaggi

How does the $100 billion AUM to AB through the Equitable merger stack up against the Blackstone mandate, which is currently short of its target? Will satisfying Blackstone's mandate push out revenue synergies from AB AUM?

Marc emphasized Blackstone is a great partner and that meeting the $92.5 billion mandate is a temporary process. The $100 billion to AB will be complementary, addressing the combined entity's need for over $80 billion in annual origination due to asset turnover and business growth. He confirmed they will reposition some current assets to AB and see significant partnership opportunities.

“the combined entity will need origination of $80-plus billion a year. If you look at the 6-, 7-year duration on our products, that means that 15-or-so percent turns over every year.”

asked by Tracy Benguigui (Wolfe Research) · answered by Marc Costantini