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Corebridge Financial NYSE: CRBG executives used the company’s fourth-quarter 2025 earnings call to highlight record full-year sales, continued capital returns to shareholders, and steps taken to de-risk the balance sheet, while also outlining where management expects earnings growth to land in 2026 as interest-rate pressures persist.
2025 performance and strategic priorities
New CEO Marc Costantini, who said he was about 10 weeks into the role, framed 2025 results around profitable growth, cash generation, and balance sheet strength. He noted that 2025 earnings per share increased 4% year-over-year, return on average equity rose by 20 basis points, and capital returned to shareholders increased 13%.
Costantini said sales rose 4% to a record $42 billion for the year. He highlighted the launch of the company’s registered index-linked annuity (RILA) product, MarketLock, saying Corebridge “quickly joined the top 10 providers” and that MarketLock was available through more than 200 distribution partners. He also said Corebridge is the only company with a top-10 position across every major annuity product category.
Costantini emphasized the firm’s ability to shift capital toward higher risk-adjusted returns, pointing to increased allocation to Institutional Markets in 2025. He said Institutional Markets sales grew 24%, led by pension risk transfers (PRTs) and guaranteed investment contracts (GICs).
De-risking actions, liquidity, and capital return
Management also pointed to balance sheet actions completed during 2025. Costantini said Corebridge executed what he described as the industry’s largest variable annuity reinsurance transaction to date, with final portions closing last month. He said the deal de-risked complex liabilities and that legacy liabilities now represent about 1% of the balance sheet.
Costantini said the company ended the year with a Life Fleet RBC ratio above 430% and holding company liquidity of $2.3 billion, both above targets. He also said Corebridge has expanded its Bermuda strategy and has ceded about $20 billion of reserves to date, describing it as a source of financial optionality.
CFO Elias Habayeb said full-year 2025 capital return totaled $2.6 billion, including $1.2 billion in the fourth quarter. That equated to a 110% payout ratio for the year, or 75% excluding proceeds tied to the VA reinsurance transaction. Costantini said the company is returning “the substantial majority” of those VA reinsurance proceeds to shareholders via share repurchases, and he also announced the board approved a 4% increase in the quarterly dividend to $0.25 per share.
Fourth-quarter results and business segment updates
Habayeb reported adjusted pre-tax operating income of $760 million and operating EPS of $1.22, up 15% year-over-year. He said the quarter included $0.10 of notable items and $0.07 from alternative investment returns, driven by underperformance in real estate equity. Excluding those items, he characterized “run-rate operating EPS” as $1.19, up 7% year-over-year. Adjusted ROE was 12.5%, up 140 basis points versus the prior-year quarter and within the company’s 12% to 14% goal.
Discussing core drivers (excluding notable items), Habayeb said:
- Fee income (about 20% of core income sources) increased 9% year-over-year, helped by product fees and growth in assets under management and administration, as well as favorable markets.
- Base spread income rose 4%, supported by strong sales, general account net flows, asset origination, and portfolio management.
- Underwriting margin (excluding VII and notable items) declined 10% due to lower mortality gains.
By segment, Habayeb said Individual Retirement adjusted pre-tax operating income increased 3% year-over-year, with spread and fee income gains partly offset by higher deferred acquisition costs and commissions. He said 2025 Fed rate cuts contributed to 6 basis points of base spread compression, though base spread income still grew year-over-year and sequentially. Fourth-quarter sales were $4.3 billion, while full-year sales were $20.6 billion. Net flows were positive by more than $600 million in the quarter. The MarketLock RILA generated $1.9 billion in full-year sales.
Group Retirement adjusted pre-tax operating income declined 1% year-over-year, which Habayeb tied to lower base spread income from a demographic-driven mix shift toward fee income. Fee income increased 2%, sales rose 13% year-over-year, and expenses were slightly elevated due to what he called a modest litigation reserve.
Life Insurance adjusted pre-tax operating income fell 30% year-over-year, primarily due to lower underwriting margins. Habayeb said mortality experience was favorable in the quarter, but less favorable than last year, and said results were consistent with prior guidance of roughly $110 million to $120 million per quarter (except for the first quarter, when mortality is typically highest).
Institutional Markets adjusted pre-tax operating income increased 8% year-over-year, and Habayeb said full-year earnings were up 19% from 2024. Reserves grew 23% year-over-year, which he attributed to PRT and GIC opportunities.
2026 outlook: rate sensitivity reduced, investments planned, EPS growth at low end of target range
Habayeb said the company expects to grow total sources of income in 2026, supported by demographics, product breadth, and distribution, but warned that base spread income in the retirement businesses will face pressure if the Fed cuts rates further. He said Corebridge has reduced its sensitivity to short-term rates, estimating that an additional 25-basis-point cut in SOFR would reduce operating earnings by $20 million to $25 million on a go-forward basis, compared with $45 million as of last September.
Habayeb reiterated guidance that Individual Retirement base spread compression should level off by the end of 2026, assuming two Fed cuts in 2026, projected net flows, and planned investments. He estimated 2026 base spread income for Individual Retirement “in the ZIP code” of $2.55 billion.
On alternative investments, Habayeb said returns are expected to be closer to long-term expectations (which he later referenced as 8% to 9%), though he anticipated some softness in the first quarter from real estate equity; in Q&A, he suggested an early estimate of a $20 million to $30 million impact.
Habayeb also said Corebridge plans to make strategic investments in digitization and customer and distribution partner experience. For 2026, he expects the ratio of operating expenses to normalized run-rate revenues to remain consistent with 2025, while operating expenses rise about 4% to 5% (about $60 million of operating general operating expenses) before benefits are realized.
On capital management, Habayeb said Corebridge expects about $900 million of share repurchases in the first half of 2026 associated with the VA reinsurance transaction, above the company’s typical 60% to 65% payout ratio. He said the company still expects to meet key targets for adjusted ROE, capital return, and run-rate EPS growth, but at the lower end of the 10% to 15% range for 2026.
Q&A highlights: PRT outlook, Group Retirement transition, portfolio exposures, and product differentiation
During Q&A, Habayeb said the reduction in SOFR sensitivity came from tighter asset-liability management and shifting investment allocation that reduced the need for macro hedges and related derivatives.
On PRTs, Costantini said the business is “lumpy” but expressed optimism, citing opportunities in the U.S. and U.K. He and Habayeb also pointed to pension plans being overfunded, supporting continued corporate balance sheet de-risking.
On Group Retirement, Costantini described an ongoing transition from spread income to fee income and said management expects another 12 to 24 months before reaching a trough in overall revenue, followed by improvement. He also reiterated a wealth management opportunity tied to rollovers and consolidating assets, which he said represents a $30 billion opportunity, supported by investments in advisors and digital capabilities.
On investment portfolio exposures, Habayeb said direct exposure to software includes about $1 billion in public credit and about $350 million in direct lending, which he called de minimis relative to a balance sheet over $250 billion. He also said Corebridge invests selectively in debt backed by data centers, typically with hyperscalers, and seeks to align debt maturities ahead of lease maturities.
Costantini pushed back on the idea that annuities are purely commodity products, emphasizing distribution strength and a goal of becoming “the easiest company to do business with” through digitization and service improvements. Management also discussed product feature differentiation; Costantini referenced a recently introduced product feature with crypto exposure, while Habayeb later clarified that the Bitcoin index exposure referenced by an analyst was in an index annuity, not in the RILA product.
Habayeb also noted planned departures expected in the second and third quarters totaling roughly $2 billion to $3 billion.
The call marked Habayeb’s final earnings call as CFO, with Costantini thanking him for his role during the company’s transition and 2025 execution.
About Corebridge Financial NYSE: CRBG
Corebridge Financial NYSE: CRBG is a publicly traded provider of retirement, life insurance and asset management solutions. Formed from the separation of American International Group’s life and retirement operations, Corebridge focuses on helping individuals, employers and institutions manage retirement income, protect against longevity and mortality risks, and invest long-term savings. The company operates under a unified brand that brings together insurance products and investment capabilities to deliver integrated financial solutions.
Corebridge’s product suite includes retirement income and annuity products, individual and group life insurance, asset management and investment advisory services, and employer-sponsored retirement plan offerings.
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