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    CRBG
    Earnings call· Jun 2026(Q2 FY26)

    Corebridge Financial Q2 FY26 earnings call CRBG

    Aug 5, 2026 Source

    Executive summary

    Corebridge Financial Q2 FY26 — Strong Earnings & Merger Progress

    Corebridge Financial delivered solid Q2 FY26 results, driven by strong core income growth and robust capital generation, despite Variable Investment Income underperforming expectations. The company continues to prioritize margin integrity and efficient capital allocation, pivoting sales towards attractive risk-adjusted returns. Significant progress was made on the merger with Equitable, which is expected to close by year-end 2026, positioning the combined entity for substantial value creation and market leadership in a growing industry.

    Highlights

    5

    • Core sources of income increased 5% year-over-year.

    • Run rate earnings per share grew 16% year-over-year to $1.35.

    • Adjusted ROE, excluding Variable Investment Income (VII), rose 90 basis points year-over-year to 10.9%.

    • Generated cash in excess of $400 million for 14 consecutive quarters.

    • Returned $412 million of capital to shareholders, including $300 million of share repurchases.

    Concerns

    5

    • Variable Investment Income (VII) came in below long-term expectations and is expected to remain below target for the remainder of the year.

    • Total company sales were down year-over-year, though up 13% sequentially.

    • Individual Retirement sales declined year-over-year and sequentially due to competitive conditions.

    • Group Retirement Adjusted Pretax Operating Income (APTOI) decreased 7% year-over-year.

    • Life Insurance APTOI declined 11% year-over-year.

    Guidance & targets

    10
    CategoryTargetConfidence
    Combined company earnings
    $5 billion
    high materiality
    High
    Combined company cash generation
    $4 billion
    high materiality
    High
    Combined company Return on Equity (ROE)
    over 15%
    high materiality
    High
    Cost synergies from merger
    $500 million
    high materiality
    High
    Variable Investment Income (VII) returns
    remain below target
    medium materiality
    High
    Individual Retirement base spread income
    approximately $2.55 billion
    medium materiality
    High
    Individual Retirement price compression
    level off
    medium materiality
    High
    Group Retirement large plan surrenders
    not expect any
    low materiality
    High
    Share repurchases
    approximately $350 million
    high materiality
    High
    Pension Risk Transfer (PRT) activity
    uptick
    medium materiality
    High

    Segment performance

    4
    SegmentRevenueYoYQoQMargin
    Individual Retirement
    Sales declined year-over-year and sequentially, but the company prioritized margin integrity. APTOI increased 5% sequentially.
    Sales: $3.8 billionNet flows: positiveFee income growth: 17% year-over-year
    		———APTOI flat year-over-year
    Group Retirement
    Transitioning from spread to fee-based business. Lower spread income and higher operating expenses contributed to APTOI decrease.
    Fee income growth: 15% year-over-yearSpreads: increased sequentiallyAUMA: grew sequentially and year-over-yearPlan Sponsor Net Promoter Score: rose 19 points year-over-year
    		———APTOI decreased 7% year-over-year
    Life Insurance
    Run rate APTOI was above the top end of the guide. Mortality and underwriting results were favorable, though less so than the prior year.
    Sales: $870 millionSales growth: increased year-over-year and sequentiallyMortality and underwriting results: favorableRun rate APTOI: $122 million
    		———APTOI declined 11% year-over-year
    Institutional Markets
    Consistent growth engine with attractive risk-adjusted returns. Sales included significant GIC issuances. Pension Risk Transfer activity expected to pick up in H2 2026.
    Sales: $2.6 billionGIC issuances: $1.8 billionUnderlying reserves growth: 17%AUMA growth: 12%
    		———APTOI increased 36% year-over-year

    Operational metrics

    27
    Core sources of income
    5%up year-over-year
    Q2 FY26

    Core sources of income, which excludes VII, increased 5% year-over-year, illustrating our ability to grow across a variety of markets.

    Run rate operating EPS
    $1.3516% increase year-over-year
    Q2 FY26

    Adjusting for long-term alternative investment returns, we delivered a run rate operating EPS of $1.35, representing a 16% increase year-over-year.

    Adjusted Return on Equity (ROE) excluding VII
    10.9%up 90 basis points year-over-year
    Q2 FY26

    Consistent with guidance, our adjusted return on equity, excluding VII, was up 90 basis points year-over-year to 10.9%.

    Adjusted Return on Equity (ROE)
    11.4%
    Q2 FY26

    Finally, adjusted ROE was 11.4% or 13.8% on a run rate basis, within our 12% to 14% ROE targeted range.

    Run rate Adjusted Return on Equity (ROE)
    13.8%
    Q2 FY26

    Finally, adjusted ROE was 11.4% or 13.8% on a run rate basis, within our 12% to 14% ROE targeted range.

    Cash generation streak
    14
    Q2 FY26

    We've now generated cash in excess of $400 million for 14 consecutive quarters, showcasing the strength of our balance sheet and underlying businesses.

    Normalized payout ratio
    84%
    YTD FY26

    In the second quarter, we returned $412 million of capital to shareholders, including $300 million of share repurchases for our year-to-date normalized payout ratio of 84%.

    Total company sales growth (rolling 12-month)
    4%year-over-year
    Rolling 12-month

    Furthermore, on a rolling 12-month basis, which adjust for seasonal fluctuations and the lumpy nature of the Pension Risk Transfer business, we saw total company sales grow [ 4% ] year-over-year.

    Holding company liquidity
    $1.4 billion
    Q2 FY26 end

    We ended the quarter with over $1.4 billion in holding company liquidity supported by our insurance company distributions of $475 million of dividends in the quarter and our liquidity exceeds the holding company's needs for the next 12 months.

    Insurance company distributions
    $475 million
    Q2 FY26

    We ended the quarter with over $1.4 billion in holding company liquidity supported by our insurance company distributions of $475 million of dividends in the quarter and our liquidity exceeds the holding company's needs for the next 12 months.

    Spread income
    4%increased year-over-year
    Q2 FY26

    Within that, spread income increased by 4%, benefiting from asset repositioning and growth in the underlying business as we have consistently reported positive [ net flows ].

    Fee income
    15%increased year-over-year
    Q2 FY26

    Fee income increased 15%, driven by growth in assets under management and administration and favorable market tailwinds.

    Underwriting margin
    1%decreased year-over-year
    Q2 FY26

    Lastly, underwriting margin decreased 1% year-over-year. We continue to see positive underwriting results, though they were less favorable than the prior year quarter.

    Investment portfolio average credit rating
    A-
    Q2 FY26 end

    The portfolio remains high quality with an average credit rating of A- and 96% investment grade.

    Investment portfolio investment grade percentage
    96%
    Q2 FY26 end

    The portfolio remains high quality with an average credit rating of A- and 96% investment grade.

    Private debt investment grade percentage
    91%
    Q2 FY26 end

    Within private debt, the book remains 91% investment grade, our private credit assets continued to perform in line with our expectations.

    GIC book percentage of general account
    5%compared to 10% to 15% for major competitors
    Q2 FY26 end

    Our GIC book represents 5% of our general account compared to 10% to 15% for major competitors, demonstrating ample room for additional growth.

    Automated underwriting for new business
    80%
    Q2 FY26

    Our sales continue to benefit from our platform that leverages automated underwriting for more than [ 80% ] of the new business.

    Policies issued in 30 minutes or less target
    50%
    Target

    Our goal is an industry-leading new business experience that increases fully digital submissions and speeds up suitability checks with 50% of policies issued in 30 minutes or less.

    Wealth management assets (Group Retirement)
    $20 billion18% increase year-over-year
    Q2 FY26

    In the quarter, our wealth management assets rose to $20 billion, an 18% increase year-over-year.

    Wealth management growth opportunity (Group Retirement)
    $30 billion
    Future

    We continue to see a $30 billion growth opportunity by further capturing IRA rollovers and consolidating household assets within our current customer base.

    Adjusted pretax operating income
    $664 million
    Q2 FY26

    We reported adjusted pretax operating income of $664 million and earnings per share of $1.12, driven by growth in base spread income and fee income.

    Adjusted EPS
    $1.12
    Q2 FY26

    We reported adjusted pretax operating income of $664 million and earnings per share of $1.12, driven by growth in base spread income and fee income.

    EPS excluding VII impact
    14%increased year-over-year
    Q2 FY26

    Excluding the impact of VII, EPS increased by 14% year-over-year.

    Combined company customer base
    over 10 million
    Post-merger

    Starting out, the combined firm will have over 10 million customers.

    Annual origination need (combined entity)
    $80+ billion
    Annual

    The combined entity will need over $80 billion in annual origination due to asset turnover and business growth.

    Blackstone mandate target
    $92.5 billion
    Q3 FY27 end

    Corebridge has a commitment to reach $92.5 billion with Blackstone by the end of Q3 FY27.

    Industry KPIs

    1
    MetricValueDetails
    Capital returns$412 millionUSD

    Product announcements

    4
    ProductTypeDetails
    AI agentslaunch
    Digital service infrastructureupdate
    New business acquisition platformlaunch
    Individual Retirement product enhancementsupdate

    Deals & partnerships

    2
    EquitableShareholder vote approved the merger of Corebridge Financial with Equitable.

    Federal Antitrust Review and FINRA approval are complete. All state and international regulatory filings have been submitted. Leadership structure is taking shape.

    HartfordEquitable divested its Employee Benefits business to Hartford.

    Described as a 'great transaction' for both parties, selling a subscale business for Equitable.

    Risks & headwinds

    4
    Variable Investment Income (VII) underperformanceremainder of the year

    below long-term expectations

    Mitigation: Management does not foresee material change in the short term. Impacted by market decline in software, market volatility from Middle East conflict, and broader macro/geopolitical environment.

    Competitive tension in Individual Retirementearly Q2, next couple of quarters, bottom out at the end of 2026

    softer sales early in Q2, single-digit compression in spreads expected for next couple of quarters

    Mitigation: Prioritizing margin integrity, pivoting capital deployment to higher growth areas (e.g., institutional markets), product enhancements, and refining living benefit offerings. Expects sales to rebound in Q3.

    Lower activity in Pension Risk Transfer (PRT) marketH1 FY26

    lower activity in H1 FY26

    Mitigation: Expects an 'uptick' in H2 FY26 due to overfunded pension plans and strong appetite for derisking solutions. Corebridge targets specific case sizes and plan types.

    Large backlog of PE exitsQ2 FY26

    not been meaningfully reduced

    Mitigation: Impacts realization of gains in alternative investments. Management is guiding lower for VII returns for the remainder of the year.

    What to watch in Q3 FY26

    5

    Individual Retirement sales rebound

    Q3 FY26
    CurrentSales down year-over-year and sequentially in Q2, but June was strongest month.
    TargetRebound in Q3

    Why it matters

    Indicates effectiveness of product enhancements and competitive positioning in a key segment.

    All else being equal, we expect steady sales and positive net flows for the rest of the year... we expect obviously our retail sales to rebound in Q3.

    Q&A highlights

    6

    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

    2 min read7 chapters

    Detailed Narrative

    01

    Merger with Equitable Progress

    The shareholder vote approving the merger with Equitable was successful, validating the combined company's attractiveness. The leadership structure is taking shape, with the first three organizational levels determined. Federal Antitrust Review and FINRA approval are complete, and all state/international regulatory filings have been submitted. The company expects to announce the new Board soon and anticipates closing the transaction by year-end 2026.

    02

    Strategic Focus on Capital Allocation

    Corebridge emphasizes its role as a judicious capital allocator, dynamically shifting between products and businesses (e.g., retail annuities, institutional markets) based on risk-adjusted returns. This approach was evident in Q2, where the company prioritized margin integrity over volume in Individual Retirement, pivoting towards institutional markets and GICs which offered more attractive IRRs.

    03

    Customer Experience and Digital Transformation

    The company is committed to improving customer experience, driven by a Customer Council and Champions Network. Initiatives include launching AI agents in Group Retirement to reduce call times, enhancing digital service infrastructure in Life, and implementing a new business acquisition platform to speed up policy issuance. The goal is an industry-leading digital experience, increasing fully digital submissions and accelerating suitability checks.

    04

    Individual Retirement Dynamics

    While Q2 sales declined year-over-year and sequentially due to competitive conditions, sales momentum improved in June and continued into July. The company expects retail sales to rebound in Q3, driven by product enhancements (e.g., index annuities, living benefits, new indices) and a focus on more sophisticated client solutions rather than simple structures.

    05

    Institutional Markets Growth Opportunity

    Corebridge sees significant upside in Institutional Markets, particularly GICs and Pension Risk Transfer (PRT). The GIC book is only 5% of the general account, compared to 10-15% for major competitors, indicating ample room for growth. PRT activity, though lumpy and lower in H1, is expected to pick up significantly in H2 2026 due to overfunded pension plans and strong derisking appetite.

    06

    Investment Portfolio Management

    The investment portfolio remains high quality with an average credit rating of A- and 96% investment grade. Proactive management includes assessing sectors and rotating into preferred areas, such as investment-grade public assets, RMBS, and private ABS, to increase yield while maintaining or improving credit quality. New money yields continue to exceed roll-off yields, supporting net investment income growth.

    07

    Life Business Outlook

    The Life business delivered strong underwriting results and favorable mortality in Q2, reflecting high-quality underwriting and distribution. Management is bullish on the Life segment, aiming to double its size over time⏳ by leveraging distribution opportunities and improving digital connectivity. The upcoming merger with Equitable will also provide access to VUL products, offering revenue synergies.

    AI-generated summary of the company’s earnings call. Not investment advice.