F&G Annuities & Life Q2 Earnings Call Highlights

Second-quarter adjusted earnings were $85 million, or $0.65 per share. Results fell from the prior quarter and year-earlier period, primarily because of lower alternative-investment returns and the impact of the F&G Life Re reinsurance transaction. Assets under management before reinsurance increased 8% year over year to $74.7 billion , while core retail sales reached $1.8 billion—one of the company’s strongest quarters—despite weaker industry fixed indexed annuity sales. Management is prioritizing fee-based, higher-margin businesses, disciplined capital allocation and growth in retail, life insurance, pension risk transfer and reinsurance. F&G is also exploring a strategic partner for Peak Altitude while aiming to retain a minority stake.

F&G Annuities & Life NYSE: FG reported second-quarter adjusted net earnings of $85 million, or $0.65 per share, as lower alternative-investment returns and the impact of a reinsurance transaction weighed on results. Management said the quarter was largely in line with expectations and highlighted growth in assets under management, strong core retail sales and continued efforts to shift toward more fee-based, higher-margin and less capital-intensive businesses. CEO and President Conor Murphy, speaking on his first earnings call in the role, said the company is focused on expanding its retail and institutional franchises while maintaining disciplined capital allocation. Murphy previously served as F&G's chief financial officer and president before becoming CEO.

Assets under management before reinsurance rose 8% from a year earlier to $74.7 billion as of June 30. Retained AUM totaled $55.9 billion, reflecting positive asset flows that were partly offset by the first-quarter cession of a $1.8 billion in-force block associated with the F&G Life Re sale and a $750 million Funding Agreement-Backed Note maturity during the second quarter. Gross sales totaled $2.7 billion, including $2 billion of core sales and $700 million of opportunistic sales. Core retail sales of indexed annuities and indexed life insurance reached $1.8 billion, which Murphy described as one of F&G's strongest quarters on record for core retail sales. He said the result came despite a year-over-year contraction in industry fixed indexed annuity sales. Core institutional pension risk transfer sales were $200 million, while opportunistic sales included roughly $600 million of funding agreements and $100 million of Multi-Year Guaranteed Annuities, or MYGAs. Management said it has de-emphasized MYGA sales because current returns are below its threshold. Net sales were $1.5 billion, reflecting reinsurance activity consistent with the company's capital targets for fixed indexed annuities and MYGAs. F&G said 97% of fixed maturities in its retained investment portfolio were investment grade. Fixed-income yield increased to 4.91% from 4.77% in the first quarter and 4.83% in the prior-year quarter. Credit-related impairments averaged six basis points over the past five years and were two basis points during the first half of 2026. The alternative-investment portfolio totaled $4 billion, or about 8% of the retained portfolio, including approximately $3 billion of limited partnerships and $1 billion of other equity interests. Annualized alternative-investment returns were approximately 5.9% in the second quarter, down from 8.3% in the first quarter. Murphy said many of those investments remain in earlier stages of their value-creation cycles. Earnings and Capital Position Interim CFO Mark Wiltse said second-quarter alternative-investment income was $49 million, or $0.38 per s...