Brighthouse Financial (BHF) risk factors, FY2025 10-K

Risks Related to Our Business

1. 01See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Policyholder Liabilities.”
2. 02The cost of our hedging strategy may also be greater than anticipated if adverse market conditions were to limit the availability, and increase the costs of, the derivatives we intend to employ, and such costs may not be recovered in the pricing of the underlying products we offer
3. 03As part of our risk management strategy, we estimate the impact of various market factors under certain scenarios on our variable annuity statutory free cash flow, our reserves, or our capital (collectively, the “market sensitivities”)
4. 04We seek to mitigate exposure to interest rate risk associated with these liabilities by holding invested assets and interest rate derivatives to closely match our ULSG Target in different interest rate environments
5. 05Changes in accounting standards issued by the Financial Accounting Standards Board may adversely affect our financial statements
6. 06If there were an event of default under any of the agreements governing our outstanding indebtedness, we may not be able to incur additional indebtedness and the holders of the defaulted indebtedness could cause all amounts outstanding with respect to that indebtedness to be due and payable immediately
7. 07Reinsurance may not be available, affordable or adequate to protect us against losses
8. 08Factors affecting our competitiveness may adversely affect our market share and profitability
9. 09We may experience difficulty in marketing and distributing products through our distribution channels
10. 10third-party provider raises the rates that it charges us for its services, we may not be able to pass the increased costs onto our customers and our profitability may be negatively impacted as a resultNew
11. 11As a holding company, BHF depends on the ability of its subsidiaries to pay dividends
12. 12Risks associated with climate change could adversely affect our business, financial condition and results of operations
13. 13Economic uncertainty resulting from a public health crisis or similar event could impact sales of certain of our products, and we may decide or otherwise be required to provide relief to customers adversely affected by such an event, similar to the relief we provided in connection with the COVID-19 pandemic
14. 14We could face difficulties, unforeseen liabilities, asset impairments or rating actions arising from business acquisitions or dispositions67% rewritten
15. 15The capital and credit markets may be subject to periods of extreme volatility. Disruptions in capital markets could adversely affect our liquidity and credit capacity or limit our access to capital which may in the future be needed to operate our business and meet policyholder obligations46% rewritten
16. 16For our insurance subsidiaries, the principal sources of liquidity are insurance premiums and fees paid in connection with annuity products, as well as cash flows from our investment portfolio to the extent consisting of cash and readily marketable securities

Market Valuation Risk

1. 17Mortgage loans in our portfolio also face default risk. An increase in the default rate of our mortgage loan investments or fluctuations in their performance could have a material adverse effect on our financial condition and results of operations

Other Risks

1. 18We are also exposed to other risks outside of our control, including foreign currency exchange rate risk relating to the variability in currency exchange rates for non-U.S. dollar denominated investments, as well as other financial and operational risks related to using external asset management firms
2. 19See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Investments — Investment Risk Management Strategy” for discussion of how we manage the risks related to our investment portfolio

Regulatory and Legal Risks

1. 20business, or could influence ratings agencies to downgrade our financial strength ratings, each of which could cause a material adverse effect on our business, financial condition and results of operationsNew

Operational Risks

1. 21intended to update our protective measures, may increase our risk of a breach or gap in our security, and there can be no assurance that any such efforts will be effective in preventing or limiting the impact of future cyberattacksNew