Corebridge Financial (CRBD) Q2 2026 earnings call transcript

I would now like to hand the conference over to Isha Mu Darissa, Head of Investor and Rating Agency Relations. Please go ahead. Good morning, everyone, and welcome to Corbridge Financial Earnings Update for the 2nd Quarter of 2026. Joining me on the call are Mark Costantini, President and Chief Executive Officer, Chris Biliagny, our Interim Chief Financial 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. Corbridge'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. Accept is required by the applicable securities laws. Corbridge is under no obligation to update any forward looking statements if circumstances or management estimates their 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-gapped financial measures. The reconciliation of such measures to the most comparable gap figures is included in our earnings release, financial supplement, and earnings presentation, all of which are available on our website at investors. corbridgefinancial. com.

With that, I would like to now turn the call over to Mark and Chris for their prepared remarks. Mark?

Good morning, and thanks for joining us. I'm delighted to be with you today following the successful shareholder vote, improving the merger with equitable. The shareholder's support of this transaction is a powerful validation of the attractiveness of the combined company. We're more confident than ever about the future we're building together.

Turning to the second quarter highlights, we delivered strong results consistent with our full-year guidance. Core sources of income were up 5% year over year, while variable investment income came in below our long-term expectations. Our underlying fundamentals remain strong. Our run rate earnings per share were up 16% year over year. Consistent with guidance, our adjusted return on equity, excluding VII, was up 90 basis points year over year to 10.9%. And our cash generation remained strong. We've now generated cash and excessed at $400 million for 14 consecutive quarters, showcasing the strength of our balance sheet and underlying businesses. In the second quarter, we returned $412 million of capital to shareholders, including 300 million of share repurchases, for a year-to-date normalized payout ratio of 84%.

Turning to slide 4, our top line performance was resilient. While total company sales were down year over year, sales increased sequentially by 13%. Furthermore, on a rolling 12-month basis, which adjusts for seasonal fluctuations and the lumpy nature of the pension risk transfer business, we saw total company sales grow by 4% year over year. This is a testament to our product depth and commitment to margin integrity across cycles. Equally important, we excel at allocating capital efficiently. Of note, our breadth of distribution enables us to shift between products and businesses toward the risk adjusted returns are most attractive. In individual retirement, we've been a top five provider for more than a decade and are the only insured with a top 10 sales ranking across all annuity products.

We continue to prioritize pricing discipline given tighter competition. Conditions improve in the latter part of the quarter as yields rose and sales momentum resume, making June the strongest sales month of the year. All else being equal, we expect steady sales and positive net flows for the rest of the year. In group retirement, our transition from a spread to fee-based business is continuing in line with expectation.

In the quarter, our wealth management assets rose to $20 billion and 18% increase year over year. We continue to see a $30 billion growth opportunity by further capturing IRA rollovers and consolidating household assets within our current customer base. As a result of our efforts to improve the customer experience, we are also starting to see an uptick in group retirement business wins.

In our life business, we've been a top tier provider of term life for nearly a decade. In the quarter, we delivered run rate earnings above our typical guide reflecting strong underwriting results. Our sales continued to benefit from our platform that leverages automated underwriting for more than 80% of their new business.

Turning to institutional markets, the GIC market has grown rapidly over the past few years with core bridges reserves nearly doubling over the same time period. In the quarter, we issued $1.8 billion of GICs at attractive IRRs, and we continue to see meaningful opportunities for the remainder of the year. Our GIC book represents 5% of our general account compared to 10% to 15% for major competitors demonstrating ample room for additional growth. In the PRT market, we still expect activity to be weighted in the back half of the year. Nothing in this market has changed. Pension plans remain overfunded.

The appetite for de-risking solutions remain strong, and we expect a double-digit reserve growth we've achieved since 2021 to continue. Turning to slide 5, since we announced the transaction, our conviction has only grown that the merchant company will be uniquely positioned to deliver exceptional value. Our industry is in the midst of significant growth opportunity, and newity sales have grown from roughly $250 billion a year in 2021 to more than $450 billion in 2025.

Despite this growth, new corporate research finds that only 28% of people are confident spending in retirement, with fears of running out of money being the top concern. By contrast, those with a de-cumulation plan, especially one that includes guaranteed lifetime income, are far more confident. In short, many more Americans want and need are advice and solutions. Another powerful trend is the massive transfer of wealth between generations, with 100 trillion in assets that is expected to be transferred by mid-century, which will fuel growth in the wealth business. In addition, the life insurance protection gap remains significant, with 100 million Americans expressing a need for coverage. The merger creates a company that is well positioned to capture this opportunity and drive profitable growth.

Starting out, the combined firm will have over 10 million customers. Given the tremendous financial needs we see, our aspiration is to significantly grow that number over time. We will have all the right attributes to succeed. Our scale will give us a lower cost of capital, greater efficiency, comprehensive customer solutions, and the ability to invest more while attracting top talent. We'll have a large and formidable multi-channel distribution system to reach the broadest possible customer base. Our integrated business model will capture the full value chain from manufacturing through distribution to asset management.

And our commitment to sound financial principles means we'll write business at attractive margins and deliver consistent capital return. By 2027, the combined company is set to unlock a compelling financial performance, with 5 billion of earnings, 4 billion in cash generation, and a return on equity of over 15%. With 500 million cost energies directly supporting these targets and a clear pathway to additional value through revenue synergies, we have a clear right to win. We continue to make excellent progress toward closing the transaction. In addition to the successful shareholder vote, the leadership structure of the combined company continues to take shape. We have determined the first three levels of the organization, and I'm confident we're building the right team to win.

The Joint Integration and Transformation Office continues to coordinate all merger activity with the goal of ensuring operational excellence for the new company. We are actively collaborating with key distribution partners to ensure a seamless transition, and on day one, we are well positioned to win with our customers. The regulatory review process is proceeding on pace. Federal antitrust review is complete. FINRA approval of the broker dealer change and control is complete, and all state and international regulatory filings have been submitted.

We expect to announce the board of the new company in the near future, and we still anticipate that their transaction will close by year end, allowing us to hit the ground running in 2027. To win in our industry, we need to have a differentiated customer value proposition, go to market with wall class distribution, and be the easiest company to do business with.

Putting the customer in the center of everything we do is a top to bottom commitment. Our customer council, sponsored by the executive leadership team, is driving customer focus across a number of initiatives, everything from the frontline service experience and the technology enablement to our corporate culture and customer safeguards. Our new customer champions network representing every business and function at Corebridge is ensuring we bring the voice of the customer and our distribution partners to everything we do. Across every phase of the customer journey, we're committed to driving continuous improvement.

In group retirement, our plant sponsored net promoter score, a key customer service metric, rose 19 points year over year, but we still have more work to do. My goal for the group retirement business is top quartile service. This will remain a key focus area. For example, we recently launched AI agents in our group retirement customer contact center to provide a better call experience. This quickly reduced repeat calls and average handling times.

In life, we enhance our digital service infrastructure and more broadly we're implementing a new business acquisition platform. Our goal is an industry leading new business experience that increases fully digital submissions and speeds up suitability checks with 50% of policies issued in 30 minutes or less. Within individual retirement, our focus is on empowering financial advisors by removing friction from their day-to-day operations. To our support of the insured retirement Institute's digital first initiative, we are modernizing the tool advisors rely on while simultaneously refining our internal workflows to eliminate application errors and accelerate policy issuance. By streamlining the touch points, we enable advisors to dedicate more time to their clients and the growth of their practices, all while driving greater operational efficiency behind the scenes.

In closing, I want to express the strong commitment of the entire leadership team to exceptional value creation both now and in the future. Thank you again for your approval of the merger. I'm confident the combined company has the right to win and I can't wait for day one to get here.

With that, I'll turn the call over to Chris.

Thank you, Mark. Starting with slide six, performance in the second quarter was on track with the full year guidance provided the start of the year highlighting diverse earnings and the things growth across our businesses. We reported adjusted pre-tax operating income of $664 million in earnings per share of $1.12 driven by growth and base spread income and sea income. Second quarter results were impacted by underperformance for variable investment income, including the impact of VII, EPS increase by 14 percent year over year. Within VII, alternative investments underperformed impacted by the market decline in software coupled with market volatility related to the resurgence of conflict in the Middle East and the broader macro and geopolitical environment. As we said earlier in the second quarter, we do not foresee this environment materially changing over the short term and expect VII returns to remain below target for the remainder of the year.

Adjusting for long-term alternative investment returns, we delivered a run rate operating EPS of $1.35, representing a 16 percent increase year over year. Finally, adjusted ROE with 11.4 percent or 13.8 percent on a run rate basis. Within our 12 to 14 percent ROE targeted range, excluding VII, this reflects a 90 basis point increase year over year, underscoring our commitment to consistent profitable growth.

Turning to slide seven, core source of the momentum, which excludes VII, increased 5 percent year over year, illustrating our ability to grow across a variety of markets. Within that, spread income increased by 4 percent, benefiting from asset repositioning and growth in the underlying business as we have consistently reported positive net flows. More notably, these earnings reflect the full earnings of the 2025 federal cost and our reduced sensitivity to short-term interest rates.

The income increased 15 percent, driven by growth in assets under management and administration, and favorable market tailwinds. Lastly, underwriting margins decreased 1 percent year over year. We continue to see positive underwriting results, though they were less favorable than the prior year quarter. As we mark comments regarding the investments we are making to become the easiest company to do business with, we reported an increase in second quarter general operating expenses in line with the guidance provided at the start of the year.

Turning to slide eight and looking at our capital position, our balance sheet continues to be healthy and strong. We ended the quarter with over $1.4 billion in holding company liquidity, supported by our insurance company distributions of $475 million to dividends in the quarter, and our liquidity exceeds the holding company's needs for the next 12 months. Capital return to shareholders was $412 million in the quarter, excluding proceeds from the earlier VA reinsurance transaction, he maintained our payout target with the year-to-date payout ratio of 84 percent, which reflects the acceleration of shared purchases in the first half of the year.

Looking ahead, we are committed to approximately $350 million in shared purchases in the second half of the year. Lastly, our insurance companies remain well-capitalized with capital ratios exceeding our targets.

Next, I'll review a few highlights to each of our businesses, the details of which can be found in the appendix for our new presentations. Most of these revolts will be impacted with variable investment income and notable items. Starting with individual retirement, sales are $3.8 billion, and that slows remaining positive, contributing to continued growth in a UMA. While sales decline year-over-year, and sequentially, I want to emphasize Mark's point earlier. We continue to prioritize margin integrity over volume by adhering to our rigorous pricing drills. We have effectively pivoted our capital deployment to our higher growth areas of our portfolio that offer superior risk adjusted returns. As we look at the full year, we still expect fresh compression to level off by the end of 2026, as older business continues to roll off, and we reaffirm our estimate for base spread income to be approximately $2.55 billion.

In addition, C&M increased 17% year-over-year, reflecting growth in the underlying business. Lastly, APT alive was flat year-over-year, reflecting increased spread and fee income offset by higher sales-related expenses, while APT alive increased 5% sequentially. During the group retirement, our results of quarter-illistry are broader strategy to grow capital light earnings, with a transition from spread-based products toward capital light fee-based business.

Reflecting that shift, fee income increased 15% year-over-year. Spreads increased sequentially, reflecting the benefit of asset repositioning, though they remain lower year-over-year due to general account outflows in line with the demographic mix shift. A UMA continued to grow sequentially in year-over-year, even with the net outflows for the quarter.

Looking ahead, we do not expect any large plan to render for the remainder of the year. APT alive decreased 7% year-over-year, reflecting lower spread income and higher operating expenses, partially offset by growth and fee income. We continue to be excited about the opportunities for group retirement. We believe our competitive advantage lies in our ability to serve as a life-length partner to our customers as they transition their needs from in plan to out of plan, ensuring we provide value at every stage of their retirement journey.

Turning to life insurance, we generated $870 million in sales this quarter, an increased year-over-year, and sequentially. APT alive declined 11% year-over-year. Mortality and underwriting results were favorable, though less so than the prior year quarter. On a run-rate basis, APT alive was $122 million above the top end of our guide we provided at the start of the year. We remain confident in the steady cash flow and stability the segment provides for the broader portfolio. Institutional markets remain the consistent growth engine. We continue to be attracted to the risk-adjusted returns as evidenced by the underlying reserves and total earnings trending upwards. Second quarter sales were strong at $2.6 billion, illustrating our ability to efficiently allocate capital across our businesses.

Sales included over $1.8 billion of kick issuances, maintaining the consistent momentum we've seen and highlighting our ongoing commitment to the market. APT alive increased 36% year-over-year. This growth was under-tended by a 17% expansion in our reserves and a 12% increase in ALUMN.

Lastly, on pension risk transfer, sales in the space are inherently lumpy. While we and the entire industry have seen lower activity in the market, we still anticipate an uptick when we move into the second half of 2026. Looking at our investment portfolio, we continue to manage our portfolio with disciplines through a dynamic market environment, while remaining proactive and identifying opportunities that support attractive risk-adjusted returns. The portfolio remains high quality with an average credit rating of a minus and 96% investment grade. We also continue to see positive credit migration across both corporate bonds and securitized products, reinforcing the strengths and resilience of the portfolio. New money yields remain above roll-off yields, which continue to support growth and net investment income.

As I mentioned earlier, we were able to execute asset repositioning at higher yields further enhancing the earnings of our investment earnings without taking on additional risk. Within private debt, the book remains 91% investment grade, and our private credit asset continues to perform in line with our expectations.

Overall, we remain comfortable with the position of our investment portfolio, that is well diversified, actively managed, and aligned with the nature and duration of our liabilities. In closing, our second quarter results reflect the resilience and strategic discipline that defined core bridge. We delivered solid performance in line with our expectations, recorded by strong underlying fundamentals in our core businesses, and our well-position to navigate the current environment. We remain confident in our ability to generate earnings and deliver on our commitments to shareholders. We appreciate your continued trust and our excited about the past ahead.

With that, I will turn the call back to Ashall.

Thank you, Chris. As a reminder, please limit yourselves to one question and one follow-up. Operator, we are now ready to begin the Q&A portion of the call.

Hey, thanks. Good morning. My first question was on retail annuities and the competitive dynamics. I know you're curious a little bit more on what you saw change during the quarter. I think you cited pretty competitive conditions earlier in the quarter that led to softer sales, but then a better tune. So, hoping to get a little bit more color on what you're seeing there. Hey, good morning, Ryan. It's Mark here.

Just to hear your voice, thanks for your question. So, yeah, I would say as we were finishing up on Q1 and heading into Q2, we saw some additional competitive tension, I would say, in the simple designs. And as you know, and as we've mentioned before, we have a significant depth and breadth of distribution across multiple channels. So, and in our view, and this is an important point here, we see ourselves, the first and foremost, as Judissa's capital allocators. And when I say distribution channels, I look at not only the retail and across all those distribution channels, but our institutional markets as well and the great business we have there. So, and we saw more options going into Q2 on the institutional market side.

And we took advantage of that. And we hold our risk return kind of attributes and objectives very strongly. And we managed very dynamically against those. And that's what you saw in Q2. Now, as you mentioned, we saw the dynamic fluctuate over the quarter. And we ended at the quarter in June being our strongest sales month on the retail side. And we entered July with some very good momentum. And we saw that momentum continue to July. So, we expect obviously our retail sales to rebound in Q3. So, there's having said so, we see and we continue to see very significant opportunities on the institutional market side. So, I think that capital allocation and the dynamic nature of our distribution is evidence to these results and what we'll see for the rest of the year.

So, thank you. Thanks. And then I had a question on individual retirement based spread income. You reiterated the full year guidance despite some of the benefits from the opportunistic as a resonditioning action. You took in the quarter. I mean, maybe it's splitting hairs, but just curious kind of why no upside to the original guidance given those actions or maybe they were contemplated to begin with. Yeah.

Hey, Ryan, it's Chris. Thanks for the question. So, thank you guys. I are reiterating the guidance of 2550. While we did see some improvements in the in the base spread as the book continues to roll off, we would still expect to see some compression spreads over the next couple of quarters, which we would still expect to bottom out at the end of 2026. So, I think that's how you should think about it. While there's some positivity of this quarter, there's still going to be natural roll off in the book, which is going to have single digit compression for the rest of the year.

Hey, first question, just a follow up on institutional spread product mark that you are highlighting, which is this really your growth there? Was that really a function of being more opportunistic at a time when retail was challenged? Or do you see that as a bigger runway and growth opportunity in the coming quarters when you think about capacity and pricing and margin and that sort of thing? Yeah, Tom, good morning. Great to hear your voice as well. So, I would say that overall, we see a lot of opportunity on the institutional market side and we see a lot of upside as we move forward. I think, as I mentioned in my remarks, you know, it's our funding and we're in back businesses, like 5% or so of our balance sheet.

If you look at the environment, you know, a lot of players are hovering more around 10 to 15%. I think so. So, we have a lot of runway and upside there. I think when you combine the balance sheets and ourselves and equitable, I think you'll have even more, I would say, demand and appeal for that type of offering for us. So, I do see some growth at attractive risk return margins as we move forward. In addition to, you know, as Chris mentioned in his remarks, you know, at the back half of the year, we see opportunities on the pension risk transfer side. And I would say we started in Q3 with some, I would say tailwinds in both those businesses.

Again, as I mentioned to Ryan that we got back from my perspective.

Yeah, thanks, Tom. I would say that we continue to have very robust discussions with Nipon about co-manufacturing products for, you know, the local Japanese market, you know, we and they feel that their economy and the demand for products that, you know, where we have a significant expertise that manufacturing is growing in Japan. And it's not lost on Nipon that, you know, there's a vibrant opportunity there to their proprietary channel and to their third party broker dealer channel right in bank channels. So, you know, when I guess the way I'll say it is probably in the third or fourth inning of those discussions, but, you know, they are moving in a good direction, but it's too early to tell, you know, when we kind of agree on whatever we could do together.

And then obviously, like it is the case here in North America, you know, you need the father product with the FSA and needs to be developed and manufactured and, you know, start issuing it. So, that's, you know, there's a timeline there as well. So, but, you know, we are cautiously optimistic that there will be a lot of opportunity for us and Nipon and they have wonderful brand and distribution there with share and the collaboration is strong across both firms. So, you know, we are excited about the prospects as you mentioned there. So, okay, thank you.

Hey, it's a neat, good morning. It's Mark. How are you? So, thanks for your question. You know, I would say as we, you know, announce the transaction and you've heard, obviously, Robin and myself, and particularly talk about it a lot, we expect that, you know, expense saving the 500 plus 100 million a year, you know, within two years of obviously at the merger. So, that, you know, this market remains attractive to us. You need scale. There's a fixed cost to, you know, kind of digitizing our business, implementing and deploying AI. And there's an obvious scale advantage to the expense ratio as you're implicitly referring to here, you know, in our business. And we do expect to see the benefit of that.

But I would say it will span a number of dimensions from the efficiency of our capital use, the efficiency of our and the depth and breadth of our distribution, our ability to pivot products, depending on where we see the options and the quiet needs, the institutional market side that, you know, I just discussed with Tom here. So, I would say, and obviously on the origination side, the great partnership will have, obviously, what alliance currency or an origination and, you know, the great partnership we have with Blackstone Blackrock, I think will give us on the main across all these dimensions, very significant, not competitive presence. And that's why looking forward to the merger and very much shows.

So, all of that, I would say, would factor into how we see the market.

Yeah, I'll mention one comment and I'll pass it to Lisa, our chief investment officer, which will give you some perspective. But, you know, I would remind everybody that when you look at their concentration of all on our balance sheet, it's like less than 3%, right? And it's very talkfully, you know, to that level, which, you know, lines up with, you know, our long-tail liabilities. And you can see a lot of the all that's being deployed against our institutional markets and more specifically our pension risk transfer business, which has longer tail liability, some of our life business, obviously. And, you know, it's an economically attractive asset to defeat those long-tail liabilities that otherwise there's no credit assets available, right?

So, I think that's the frame we need to think about it when you think about how we manage this portfolio. Not to this specific question you have, I'll pass it to Lisa.

Thanks, Mark. Good morning. You know, as Mark mentioned, you know, when we think about our long-term return, and so it's, it's over, the very long term and over multiple cycles. And, you know, our all, it was primarily PE, but it's real estate equity in the form of funds, and then there's residual hedge funds. And, you know, what you have seen in the past is PE, our alt performance has been impacted by maybe real estate returns or hedge funds, but in this quarter, you know, the marks on our PE funds throughout the underperformance, and up until this time, PE has really been meeting our long-term expectations. And so, what you're seeing is, normally with our PE portfolio, it's very broad and diverse, and we'll have weakness in one sector offset by strength in another.

Unfortunately, in this past quarter, the market was weaker all around. The large backlog of PE access and existing investments had not been meaningfully reduced, so we're not getting the realization that would, you know, generate gains to offset some of our marks. We did guide lower, and we think just continued in the market around, you know, AI evaluation, geopolitical uncertainty, you know, that could impact returns going forward, higher rates can certainly impact the market on real estate funds. And although we think we could see positive returns in the second half, we are not going to hit or do not expect to hit our long-term expectations for this year, in particular.

Can you just provide some more color on the actions that you took in the quarter to support the expansion, how much was repositioned, and do you see further similar opportunities in the back half of the year?

So, I'll take that high job, please for one to know. Thanks for the question. You know, as Chris mentioned in his script, you know, this is a very high quality, well-diversified portfolio, and 96% of it is investment grade. The portfolio has remained resilient through a variety of cycles, but we do proactively manage the portfolio with a focus on our overall balance sheet.

And regarding asset repositioning that we've done, it really entails assessing names or sectors where less sanguine in, and we'll rotate into other sectors where we prefer the outlook, or we see relative value opportunity. So, this is very proactive. And given the moving rate, this repositioning has allowed us to increase shield line maintaining our credit quality. I mean, so we feel pretty comfortable with it. It's something we continue to do, and so that really sums it up.

But I guess just given the strong capital and cash generation, and where the stock's trading at, would you consider drawing down some of the access to exceed your payout ratio for this year? Yeah, Joel, Chris, thanks for the question. So, you know, we do about $1.4 billion of capital at the whole, at the whole code that is in excess of our 12 month needs. But at this point, we remain committed to, you know, approximately $350 million of shared purchases during the year in line with our pre merger plans.

You know, for 2026, that would mean we were purchased about 1.9 billion shared purchases. And if you look at 25 and 26, you know, we would have purchased over $4 billion of shared purchases. So I think overall, at this point, we're comfortable with our levels. And as we looked at the combined company and the $4 billion of cash generation of the new co, I think we'll have an opportunity to revisit that as part of our investment today.

And you know, as I think you will have heard from, you know, Mark and Robin there, obviously it's their, you know, sale of a subscale business, but a wonderful platform that augments what, you know, Hartford is doing. So, you know, when, when many dimensions now to your question, you know, I would say that that was the only subscale operation. When you look at the combination, everything else, you know, I think we will have a leadership, you know, kind of position and an option for growth and upside. So, as a short answer to the question is, no, we don't see any other businesses currently are activities that, you know, we see as having the same characteristics that led to this transaction.

So, that's my perspective.

Yeah, thank you, Wes. That's a very good question. You know, one of the things, and I think I may have mentioned this to some of you, you know, over the six, seven months I've been here. And, you know, when I dug into the bounty and the businesses, I saw, you know, mortality results being very favorable here versus expected for a number of quarters, which speaks, you know, very highly to the quality of the underwriting, the quality of business, the quality of the distribution. And, you know, that continues to be the case. And we saw that continue in Q2 with some very strong mortality results. And, you know, like, and you've seen, I think, in some pockets across the industry, some very favorable mortality.

And, you know, there's some, in fact, I think, of coming out of COVID and what that did, and as well, some of these new drugs, obviously, that are affecting people's longevity. So, all in all, we are bullish on the light business, and as well, in line with some of the comments I've been before, I see no reason why our business should not be twice the size it is right now, given the distribution option we have and the attractive risk return profile and the complementary nature of that liability versus everything else we're doing. And I'll mention as well that as we come together with the equitable, you know, we'll have access to the VEL product. And I think we've mentioned there's a lot of revenue synergies, and that's definitely going to be one in terms of, you know, adopting that chassis into our distribution of this.

So, we see upside on the life side, based on mortality and other dynamics in the market and demand, obviously, from, you know, the Americans for protection. So, thank you.

It's Mark here, how are you? So, I would say that the nice trends in sales we've seen heading into June and into Q3 are across the board. But, you know, we introduced some enhancements to our products and our features on our index annuity. We refined some of our living benefit offerings and, you know, and we introduced some additional indices and structures. So, we, you know, it's a complementary aspect of some, you know, new solutions for our distribution and as well as some, some upside across a number of the product lines, I would say it's across the board and not one in particular. But it's, again, I would say there's not a competitive activity into simpler structures and we try to focus on some of the more sophisticated client solutions.

I can answer that thank you for the question. So, you know, in terms of what we sold, we really sold lower yielding, high yield assets, some EM and we actually sold some lower yielding private assets that, you know, we have a secondary private trader and that shows liquidity actually in that asset and really what we rotated into was investment grade that was public assets, RMS and some private ABS but, you know, over 50% of the purchases were in single-layer higher. So, again, felt very good about, you know, incremental yield while maintaining or in some cases improving the credit quality.

How are you? So, I'm going to try to deconstruct your comments or questions here. The first comment I will make is Blackstone is a great partner of ours. You know, they originate very good assets and very attractive yield and the fees they charge are more than made up by the, you know, the overall yield and quantity of rejuvenation and how complementary it is to the rest of what we do, as is the case, by the way, for Blackrock and our own origination team and what the new, obviously, relationship alliance currency will do. So, I just want to say that, and it is true that we have a commitment to get to 92.5 billion by enough to three.

However, we look at the sourcing, we look at the nature and liabilities we're right, we look at the need, and then we find the best origination to lead that need, irrespective of what are sources and how it comes to be and whether we're 20 billion, 15 billion or anything else short, it's a temporary kind of process. So, you know, if there's a make hole to be made, it's going to be a temporary charge. You know, if that's the case, then we will get tonight to a half given the size of the balance sheet and the growth we have across our business organically. So, that's the first test. Now, you asked about the 100 billion that is going to alliance Bernstein over time.

That is going to be complementary to whatever Blackstone does. I think we mentioned that the combined entity will need origination of 80 plus billion a year. If you look at the six, seven year duration on our product, that means that 15 or so percent turns over every year. So, you'll get some natural attrition of the current assets that will flow to AB. As we grow the business, we'll have origination, and yes, we will reposition some of the assets on our current balance sheet to Alliance Bernstein. And we see a significant opportunity of partnering with Alliance Bernstein and this great origination kick ability we have on a gold board basis and we'll be able to be very complementary to Blackstone, as I mentioned in my, you know, original comments here.

So, thanks for your question.

Yeah, thanks, Tracy. I think you're referring to a recent transaction that was announced and, you know, obviously best to add them to details as to the structures I kind of came to be. But you're talking about, you know, is there a source of, you know, astute, I would say leveraging a capital and capital deployment and capital allocation? And I would say that whether it's two structures such as you're saying or other structures, I would say that the current corporation equitable and the combined entity will be highly focused on, you know, astute capital location, as you saw in terms of ourselves between the retail and social markets, but as well, using various, you know, tools available to optimize, obviously the outcomes for all our stakeholders and all of you on the phone, obviously.

So at one point to exactly that structure, but I would say capital allocation and optimized capital allocation is something that we do. Thank you.

First one, you had mentioned some of the product enhancements he implemented this quarter in retail annuities, but I was wondering if the asset repositioning was also meant to improve your competitive position in the market, or was that just more about portfolio spread off? So Pablo, you kind of, we launched at the end, but I think we got the gist of your question. It's smart. So I would say that any action that Lisa spoke about tied to the prior questions are in force management. We have obviously a pricing matrix and a pricing approach that there's very, I would say, a robust between Lisa, ALM and our liability folks on a weekly basis for all of our new business activities.

So and that's how we approach it. And then we optimize the portfolio to balance it as we see the capital markets and the environment around us at all.

Yeah, thank you very much. Question, your question is if we're seeing better mortality on the insurance side, are we seeing, you know, additional longevity on our PRD business? And I think you've mentioned, you answered your own question when you say a very different population based, very different origination and very different mortality tables using both markets to price the business, which is reflective of the actual mortality in each of those markets. Thank you.

It's Mark here. Appreciate their question. And I think you've seen some evidence for us that our PRT sales and activity are weighted to the back half. What I think is different in 2026 is that there's been lesser activity in the front half of the year than otherwise we would have seen, which enhances obviously the amount of activity we expect in the back half of the year. Now, specifically to core grids, we target a certain case size and we target a certain, I would say, plan type that has both current and deferred kind of retirees that positions as well, tied to the prior discussion we just had about mortality, longevity, and expertise in underwriting there. And the pipeline for business like the PRT business, you know, takes four to six months to build by the time, you know, the plans that are very well funded, by the way.

And obviously the interest rate levels are very attractive. So that's why we think there'll be robust activity in the back half and combination with the pipeline. We see an activity in the market and, you know, we do feel we can, you know, get the business that we target given the value that we bring to some of those structures, which is why, you know, we said what we said about, you know, the, you know, what we see for the bounce of the year.

Yeah, so I would say it's a combination of everything you're saying. There's, there's the, you know, the process are at different levels of maturity. And, you know, we have a sense of where we are in each of the process and how we view kind of our ability to be successful now. Find both our weather and what we're guiding here will happen, but we, and we feel pretty good about our prospects in the second half of the year. Thank you.

Yeah, good morning Wilma. Thank you for your question. I would say we are bullish on our life business. As I mentioned earlier, like I expect and want our sales to double over the course of time, we feel we have great distribution opportunity. And, you know, some of the things that have been holding us back over the last three years are tied to, you know, connectivity to our various distribution. You know, we've been obviously probity focused on the separation. And now we're, you know, very much deploying our investment dollars to make sure that we make it our South easiest company to do business with. And we make our songs obviously very easy for our distribution partners to do business with.

And we're seeing green shoots in our lightness tied to that. And I think that's where we see the growth. And that's what's driving the growth of our business. And as I mentioned, there's obviously a need for protection across America. And so there's an unmet need there that we'd like to get ahead of.

So on the PRT side, I don't have much more to add that to say that we feel pretty good about the second half of the year. And we feel pretty good about that space in the ensuing years and 2027 plus. And one of the implicit questions or comments, and this is as we bring together the two balance sheets and much stronger and bigger capital base and bounty, I think that will give us an opportunity to take bigger sizes of the PRT. So when you think about revenue synergies and things, we'll talk about more at an investor day next year, I would say growing our institutional markets business across, obviously, the funding agreement side, but as well the PRT side and other services we offer there will be one of the revenue synergies of this merger, which then speaks to the second half of your question, which is, do we see more opportunity on the spread lending side of our institutional markets business?

And the answer is yes. And as I mentioned in my remarks, five or so percent of our balance sheet is by the FABN kind of offerings where that's much greater percents for some of our peers. So there's a lot of upside for, you know, the new or core bridge and the new equitable as we move forward.

Thank you.