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The call emphasizes multiple substantive positives: a strategic merger with clear synergy targets, robust underlying operating performance (ex-VII), meaningful fee and asset growth, strong capital/liquidity, and prioritized investments in customer experience and digital capabilities. The primary negatives are a short-term drag from variable investment income, some spread and underwriting pressure versus a strong prior-year comp, transitional impacts in group retirement as the business shifts to fee-based earnings, and ordinary integration/execution risks tied to the merger. Management provided quantified improvements (EPS +13% ex-VII, run-rate EPS +9%, adjusted ROE +120 bps) and clear mitigation plans for investment exposures and integration, suggesting the positives outweigh the near-term headwinds.
The company reiterated robust forward guidance tied to the pending Equitable merger (3 franchises, >12 million customers, ~$1.5 trillion AUM/AUA) including $500 million of identified expense synergies plus additional revenue, tax and capital upside, immediate EPS and cash accretion and a target that earnings exceed $5.0 billion and cash generation top $4.0 billion by 2027 (with EPS and cash‑generation growth rates >10% by year‑end 2028). Q1 reported metrics and near‑term guidance included adjusted pretax operating income of $629 million, GAAP EPS $1.05 (run‑rate operating EPS $1.17, +9% YoY; EPS ex‑VII/notables +13% YoY), adjusted ROE 10.6% (~12% run‑rate, +120 bps ex‑VII/notables), holding‑company liquidity >$1.7 billion, Q1 capital return $1.4 billion (completed VA reinsurance proceeds $1.8 billion), FY‑2026 insurance dividends expected ~$2.3 billion (including $300 million Benra Bulls), reaffirmed IR full‑year spread income ~ $2.55 billion, fee income +9% YoY, spread income +1% YoY, underwriting margin -2% YoY, Individual Retirement sales $4.3 billion with ~$0.5 billion net general‑account inflows, Group Retirement advisory/brokerage AUMA +14% YoY with net flows >$300 million and ~60% fee‑based earnings, Life sales $850 million with seasonal mortality $15–20 million, Institutional reserves +18% with $1 billion of GICs issued, and long‑term alternative investment return target of 8–9%; private debt sits at $49 billion of $284 billion total portfolio (91% investment grade), middle‑market lending $3.3 billion (1% of portfolio) and BDC debt $1.7 billion.
Announced merger creating a diversified financial services company with more than 12 million customers and $1.5 trillion in assets under management and administration; targeted $500 million of run-rate expense synergies plus additional revenue, tax and capital synergies; management expects earnings to exceed $5 billion and cash generation to top $4 billion per year by 2027 and 10%+ EPS/cash generation improvement by year-end 2028.
Excluding variable investment income (VII) and notable items, operating EPS increased 13% year-over-year; adjusted return on equity improved by 120 basis points; adjusted pretax operating income was $629 million and reported EPS was $1.05 for the quarter; run-rate operating EPS was $1.17 (a 9% YoY increase).
Fee income grew 9% year-over-year, driven by higher assets under management and advisory; advisory and brokerage assets (group retirement) rose to all-time highs and grew ~14% YoY with net inflows; institutional markets AUM/A increased 13% and reserves in institutional markets grew 18% year-over-year.
Individual Retirement premiums and deposits (sales) were $4.3 billion in the quarter with positive net flows ~ $0.5 billion into the general account; Life sales were $850 million; Group Retirement net flows exceeded $300 million and Institutional markets issued over $1 billion of GICs (including first CAD-denominated GIC).
Holding company liquidity exceeded $1.7 billion at quarter-end; U.S. insurance companies distributed $925 million in dividends during the quarter; capital returned to shareholders totaled $1.4 billion in the quarter and management reaffirmed targeted insurance company distributions (~$2.3 billion for 2026 including expected items).
Ranked #1 by J.D. Power for partner satisfaction and annuity distribution; launched customer council and multiple digital initiatives (digital submissions, real-time application status, new wealth digital experience, payroll platform for plan sponsors) to reduce friction and improve adviser/plan sponsor experience.
Completed active capital returns in the quarter and explored share repurchases pre-close of the merger; completed earlier buybacks (~$1.25 billion referenced in call) and signaled intent to repurchase in the proxy window and post-vote periods subject to blackout rules.
Statutory investment portfolio of $284 billion with $49 billion in private debt where 91% is rated investment grade; limited middle-market lending exposure ($3.3 billion, ~1% of portfolio) and BDC debt exposure of $1.7 billion (debt-only, no equity); management highlights robust underwriting, monitoring and stress testing and net positive rating migration over last four years.
Hello, everyone. Thank you for joining us, and welcome to Corebridge Financial Inc. First Quarter 2026 Earnings Call. [Operator Instructions] I will now hand the conference over to Isil Muderrisoglu, Head of Investor and Rating Agency Relations. Please go ahead.
Good morning, everyone, and welcome to Corebridge Financial's earnings update for the first quarter of 2026. Joining me on the call are Mark Costantini, President and Chief Executive Officer; Chris Filiaggi, our Interim Chief Financial Officer and Chief Accounting Officer; and Lisa Longino, our Chief Investment Officer. We will begin with prepared remarks by Mark and Chris, and then we will take your questions. Today's comments may contain forward-looking statements, which are subject to risks and uncertainties. These statements are not guarantees of future performance or events and are based upon management's current expectations and assumptions. Corebridge's filings with the SEC provide details on important factors that may cause actual results or events to differ materially from those expressed or implied by such forward-looking statements. Except as required by the applicable securities laws, Corebridge is under no obligation to update any forward-looking statements if circumstances or management's estimates or opinions should change and you are cautioned to not place undue reliance on any forward-looking statements. Additionally, today's remarks may refer to non-GAAP financial measures.
The reconciliation of such measures to the most comparable GAAP figures is included in our earnings release, financial supplem...