F&G Annuities & Life, Inc. Announces Q4 and Full Year 2025 Financial Results: Key Highlights, Strategic Moves, and Shareholder Updates

F&G Annuities & Life, Inc. (“F&G” or “the Company”) has released its financial results for the fourth quarter and full year ended December 31, 2025, providing investors and shareholders with a comprehensive overview of its operational performance, capital management activities, and strategic advancements. Below are the key takeaways and material developments from the latest reports and investor presentations that may have a significant impact on the company’s share value.

Key Financial Highlights

• Solid Investment Portfolio Performance: F&G’s investment portfolio remains robust, with 97% of fixed maturities rated as investment grade, well-matched to the liability profile, and diversified across asset types. Credit-related impairments have remained low and stable, averaging 6 basis points over the past five years, which is significantly below pricing assumptions. This strong credit quality is a positive signal for long-term capital preservation and risk management.
• Adjusted Financial Metrics:
  • Adjusted Return on Assets (ROA): 0.87% for Q4 2025 and for the full year, consistent with the prior quarter but lower than the 1.06% reported in Q4 2024. This reflects continued asset growth, increasing fee income from accretive flow reinsurance, steady owned distribution margins, and disciplined operating expenses driving scale benefits.
  • Adjusted Return on Equity (ROE) ex AOCI: 8.2% in Q4 2025 and for the full year, compared to 10.3% in the prior year. The decline is attributed largely to lower-than-expected alternative investment income and other significant items.
  • Net Earnings (Loss): \$124 million for Q4 2025 (\$0.92 per diluted share), and \$248 million for the year. Adjusted net earnings were \$123 million for Q4 2025 (\$0.91 per share), and \$482 million for the full year (\$3.64 per share). Notably, investment income from alternative investments was \$278 million below management’s long-term expected return of approximately 10% for the year, signifying a drag on bottom-line results.
• Sales and Asset Growth:
  • FY2025 Gross Sales: \$14.6 billion, marking the second consecutive year of core sales exceeding \$9 billion.
  • Net Sales: \$10.0 billion, aligned to capital targets.
  • Assets Under Management (AUM): \$57.6 billion, up 7% year-over-year, and \$73.1 billion before flow reinsurance (up 12% YoY), reflecting the Company’s strong organic growth momentum.
• Capital Return to Shareholders: F&G returned \$137 million of capital to shareholders in 2025 through common and preferred dividends, including \$38 million in the fourth quarter alone. The quarterly dividend was increased to \$0.25 per share in Q4, up from \$0.22 earlier in the year, indicating management’s commitment to returning capital as business performance supports it.

Strategic and Price-Sensitive Developments

• Transition to a Fee-Based, Higher Margin Business Model: F&G is actively shifting its business towards more fee-based, higher margin, and less capital-intensive strategies. Fee-based flow reinsurance and owned distribution margin, together with growing indexed universal life (IUL) product fees, contributed approximately 15% of 2025 adjusted net earnings (excluding significant items). The Company aims to increase this to 25% by year-end 2028.
• Operational Efficiency: The Company achieved a 10 basis point reduction in operating expense ratio (50 bps in 2025 vs. 60 bps in 2024), driving scale benefit and contributing to profitability even in a challenging investment environment.
• Strong Solvency and Strategic Sale: F&G announced a strategic sale of its Bermuda subsidiary. Coupled with an estimated risk-based capital (RBC) ratio for its primary U.S. insurance subsidiary of approximately 400%, the Company remains well-capitalized, with flexibility to support growth and return capital to shareholders.
• Investment Portfolio Stress Testing: The Company, in partnership with Blackstone, conducted stress testing under moderate and severe recession, as well as stagflation scenarios. Even under severe stress, management believes it has levers to restore positive excess capital, such as reducing new business, increasing reinsurance, and utilizing revolving credit capacity. This proactive risk management approach is a positive indicator for investors.

Other Notable Items

• Non-GAAP Financial Measures: F&G continues to emphasize the importance of adjusted net earnings, adjusted ROA, and adjusted ROE (excluding AOCI) as more representative of its underlying performance. Details and reconciliations of non-GAAP to GAAP measures are provided in the investor supplement, ensuring transparency for stakeholders.
• Dividend History and Outlook: The Company has demonstrated a consistent and increasing dividend payout, with quarterly dividends rising from \$0.21 to \$0.25 per share over the past two years. This trend may be price-sensitive for income-focused investors.
• Ratings Upgrades: F&G has received multiple ratings upgrades over recent years, including upgrades to A- and A3 from major agencies, reflecting its improving financial strength, diversified earnings, and prudent capital management.

Potential Price-Sensitive Factors

• Lower Alternative Investment Income: The significant shortfall in alternative investment income relative to long-term expectations is a material headwind that has impacted earnings. Should this trend persist, it may pressure near-term share performance.
• Strategic Sale of Bermuda Subsidiary: This transaction could affect future capital structure, regulatory risk, and solvency, all of which are closely watched by market participants.
• Capital Return and Dividend Policies: Continued share buybacks or further dividend increases, as hinted by management, could provide upside for the stock, especially if supported by operational performance and capital flexibility.
• Progress Toward Fee-Based Earnings: Successful execution of the transition toward a higher share of fee-based earnings could result in margin expansion and a re-rating of the stock over time.

Conclusion

F&G Annuities & Life, Inc. delivered a solid operational performance in 2025, with continued asset growth, expanding fee-based business, and disciplined expense management. However, weaker alternative investment income weighed on earnings. The Company’s strategic sale of its Bermuda subsidiary, robust capital return to shareholders, and positive trajectory in ratings upgrades are all notable for investors. Shareholders should closely monitor the Company’s ability to further expand its fee-based earnings, sustain capital strength, and deliver on its dividend commitments in the coming quarters, as these factors could drive future share price movements.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Forward-looking statements are subject to risks and uncertainties. Investors should review all official filings and consult with professional advisors before making investment decisions.

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