Corebridge Financial, Inc. delivered a knock-out performance in the fourth quarter of 2023, surpassing analyst expectations. The adjusted operating earnings per share of $1.04 soared past the Zacks Consensus Estimate by 5.1%, marking a 12% improvement from the previous year. Adjusted revenues also rose impressively by 11.3% year over year, reaching $5.9 billion.
A Look Behind the Numbers
The stellar results were largely fueled by robust growth in premiums and deposits across the Individual Retirement and Institutional Markets segments. Corebridge also benefited from increased sales in its spread-based product portfolio as well as higher net investment income. However, these positives were partially counteracted by reduced underwriting margins and escalated benefits and expenses.
Quarterly Operational Highlights
Premiums and deposits saw a remarkable 20% year-over-year surge, totaling $10.5 billion in the fourth quarter. The net investment income also showed an impressive 18% growth, amounting to $3 billion.
Segmental Performance
The Individual Retirement segment witnessed a whopping 38% increase in premiums and deposits, reaching $5.3 billion. This was primarily driven by higher fixed annuity and fixed index annuity deposits. On the other hand, the Group Retirement segment recorded a 7% decline in premiums and deposits due to decreased plan acquisitions and out-of-plan variable annuity deposits.
Financial Position
Corebridge wrapped up the fourth quarter of 2023 with a cash balance of $612 million, a 10.9% increase from the previous year. Its total investments also grew by 5.7%, reaching $232.6 billion. However, long-term debt saw a 15.9% uptick, amounting to $9.1 billion by the end of the quarter.
Share Repurchase & Dividend Update
During the fourth quarter, Corebridge repurchased 11.8 million common shares worth $252 million and paid out quarterly dividends of $145 million. It also distributed special dividends amounting to $731 million.
Full-Year Performance
For the entire year of 2023, Corebridge’s adjusted operating earnings per share climbed 12% year over year, reaching $4.10. Adjusted revenues also surged by 18.1% to $21.2 billion. Premiums and deposits and net investment income showed an impressive 26% and 16% year-over-year growth, respectively.
Looking Ahead
Corebridge aims to achieve a return on average equity in the range of 12-14% and maintain an average annual stockholder dividend of $600 million while sustaining a payout ratio of 60-65%.
Analyst Forecast
Currently boasting a Zacks Rank #3 (Hold), Corebridge’s strong performance continues to make it an interesting prospect for investors looking to gain exposure to the insurance industry.
Impressive Fourth-Quarter Results from Insurance Heavyweights
Several major players in the insurance industry have recently reported their fourth-quarter 2023 results, with Cincinnati Financial Corporation (CINF), The Allstate Corporation (ALL), and American International Group, Inc. (AIG) all surpassing the Zacks Consensus Estimate on their bottom-line results.
Cincinnati Financial Corporation Shines
Cincinnati Financial reported a fourth-quarter 2023 operating income of $2.28 per share, an impressive 18.1% above the Zacks Consensus Estimate. The company also saw a substantial 79.5% year-over-year surge in bottom-line results. Operating revenues for the quarter reached $2.3 billion, marking a notable 10.8% improvement from the previous year. The top line also managed to exceed the consensus mark by 1%.
In the property & casualty insurance business, CINF witnessed a momentous underwriting income of $252 million, showcasing a remarkable leap from the year-ago period’s $93 million. The unit’s combined ratio showed a noteworthy improvement as well, plummeting 740 basis points year over year to 87.5.
The Allstate Corporation’s Resilience
Allstate reported fourth-quarter 2023 adjusted net income of $5.82 per share, surpassing the Zacks Consensus Estimate by a whopping 50.4%. Operating revenues of $14.9 billion rose by an impressive 10% year over year, with net investment income improving by 8.4% to reach $604 million in the fourth quarter. The Property-Liability segment also delivered stellar performance, recording premiums earned of $12.6 billion, registering a substantial 10.7% year-over-year growth.
Total policies in force reached 192.8 million as of Dec 31, 2023, exhibiting a commendable 2% increase from the previous year.
American International Group, Inc.’s Strong Momentum
AIG reported fourth-quarter 2023 adjusted earnings per share of $1.79, which exceeded the Zacks Consensus Estimate by an impressive 12.6%. The company’s operating revenues grew by 4.6% year over year to reach $12.7 billion. Total net investment income climbed by a noteworthy 20.7% year over year to $3.9 billion, while net premiums written in the General Insurance segment amounted to $5.8 billion, reflecting a robust 2.6% year-over-year increase.
The unit’s combined ratio showcased strong improvement as well, dropping by 80 basis points year over year to 89.1%, primarily owing to advancements in the loss ratio.
These positive results reflect the resilience and adaptability of the insurance heavyweights, underscoring their ability to navigate challenging market conditions and capitalize on new opportunities. Their strong financial performances can be interpreted as a sign of the insurance industry’s enduring stability and its capacity to deliver value even in the face of adversity.
While uncertainties linger in the market, the robust performance of these key industry players offers a glimmer of hope and optimism, demonstrating the strength and resilience of the insurance sector in driving shareholder value and weathering the storms of economic volatility.
Currently, industry enthusiasts keen on tapping into this flourishing sector should keep a close watch on these companies as they continue to navigate the evolving economic landscape and pursue growth amidst changing consumer needs and market dynamics.
The strong operational and financial performance of these companies is not only a testament to their resilience but also foreshadows a promising outlook for the broader insurance industry. As the market continues its fluctuation and unpredictability, the sector presents a beacon of stability and promise, reaffirming its enduring position as a cornerstone of the financial services landscape.
Disclaimer: The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
