F&G Annuities & Life (FG) risk factors, FY2024 10-K

Risks Related to Our Business

1. 01Our debt instruments may restrict our current and future operations, particularly our ability to respond to changes or to take certain actions
2. 02Our ability to grow depends in large part upon the continued availability of capital
3. 03insurance subsidiaries, or if we are obligated to provide capital contributions in the event of funding shortfalls, we may be required to limit growth in sales of new policies which could materially adversely affect our business, operations and financial condition
4. 04We may face losses if our actual experience differs significantly from our reserving assumptions
5. 05Change in our evaluation of the recoverability of our deferred tax assets could materially adversely affect our results of operations and financial condition
6. 06We have recorded goodwill as a result of past acquisitions, and adverse events affecting the value of our reporting unit could cause the balance to become impaired, requiring write-downs that would reduce our operating income
7. 07If we are unable to attract and retain national marketing organizations and independent agents, sales of our products may be reduced
8. 08We operate in a highly competitive industry, which could limit our ability to gain or maintain our position in the industry and could materially adversely affect our business, financial condition and results of operations
9. 09Concentration in certain states for the distribution of our products may subject us to losses attributable to economic downturns or catastrophes in those states
10. 10Concentration in one or more of our products may subject us to greater volatility of sales if such products experienced a significant decrease in sales
11. 11We are subject to the credit risk of our counterparties, including companies with whom we have reinsurance agreements or from whom we have purchased options
12. 12Our business could be interrupted or compromised if we experience difficulties arising from outsourcing relationships
13. 13The loss of key personnel could negatively affect our financial results and impair our ability to implement our business strategy
14. 14Our risk management policies and procedures may not capture unidentified or unanticipated risk, which could negatively affect our business or result in losses
15. 15Changes in market conditions, regulatory landscapes, or operational environments could adversely impact performance. Additionally, any reputational issues or operational failures could affect our overall brand and market standing
16. 16Failure to comply with regulations during, or post-acquisition, can result in legal penalties, regulatory actions, or reputational damage, which could have a material, adverse effect on our business
17. 17regulatory bodies or by a specific industry in which we do business could have an adverse impact on us through increased costs or restrictions on business processes
18. 18Advancements in Artificial Intelligence, Machine Learning, and Large Language Models (“AI/ML/LLM”) pose risks and challenges
19. 19The new and emerging types of AI and their uses are very early stage in the industry and may be subject to many uncertain future developments and regulations
20. 20We rely on our investment management advisory agreements (“IMA”) with Blackstone ISG-I Advisors LLC (“BIS”) and other investment managers and sub-managers for the management of portions of certain of our life insurance companies’ investment portfolios
21. 21We have a long-term contractual relationship with BIS that limits our ability to terminate this relationship or retain another investment manager without BIS’s consent
22. 22The historical performance of BIS, or any other asset manager we engage, should not be considered as indicative of the future results of our investment portfolio, our future results or any returns expected on our common stock
23. 23Increased regulation or scrutiny of alternative investment advisers, arrangements with such investment advisers and investment activities may affect BIS’s or, if engaged, any other asset manager’s ability to manage our investment portfolio or impact the reputation of our business

Risks Related to Economic Conditions and Market Conditions

1. 24Conditions in the economy generally could adversely affect our business, results of operations and financial condition
2. 25Our investments are subject to geopolitical risk. The on-going conflicts in Russia, Ukraine and the Middle East may adversely affect our business, financial condition, results of operations and cash flows
3. 26Our investments are subject to market risks that could be heightened during periods of extreme volatility or disruption in financial and credit markets
4. 27Our investments are subject to credit risks of the underlying issuer, borrower, or physical collateral which can change over time with the credit cycle
5. 28We also maintain holdings in floating rate, and less rate-sensitive investments, including senior tranches of CLOs and directly originated senior secured loans. If realized collateral loss and recoveries differ materially from our assumptions, returns on these assets could be lower than our expectation
6. 29Interest rate fluctuations could adversely affect our business, financial condition, liquidity and results of operations
7. 30Equity market volatility could negatively impact our business
8. 31We are exposed to liquidity risk, which is the risk that we are unable to meet near-term obligations as they come due
9. 32Our business could be materially and adversely affected by the occurrence of a catastrophe, including natural or man-made disasters
10. 33Our business is subject to risk due to our owned distribution strategy and investments in distribution consolidators

Legal, Regulatory and Tax Risks

1. 34Our business is highly regulated and subject to numerous legal restrictions and regulations
2. 35Our business is subject to government regulation in each of the jurisdictions in which we conduct business and regulators have broad administrative and discretionary authority over our business and business practices
3. 36Our business in the United States is regulated by the National Association of Insurance Commissioners (“NAIC”), which continues to consider reforms including relating to cybersecurity regulations, best interest standards, risk-based capital (“RBC”) and life insurance reserves
4. 37Current and emerging developments relating to market conduct standards for the financial industry emerging from the United States Department of Labor’s (“DOL”) implementation of the “fiduciary rule” may over time materially affect our business
5. 38Our regulation in Bermuda and the Cayman Islands may limit or curtail our activities, and changes to existing regulations may affect our ability to continue to offer our existing products and services, or new products and services
6. 39The SECURE 2.0 Act of 2022 may impact our business and the markets in which we compete
7. 40The amount of statutory capital that our insurance subsidiaries have and the amount of statutory capital that they must hold to maintain their financial strength ratings and meet other requirements can vary significantly from time to time due to a number of factors outside of our control
8. 41New accounting rules or changes to existing accounting standards could adversely impact our reported results of operations
9. 42Changes in federal or state tax laws may affect sales of our products and profitability
10. 43Changes in tax law may increase our future tax liabilities and related compliance costs
11. 44The redemption of our preferred stock may require a significant amount of cash and may result in adverse tax consequences
12. 45We may be the target of future litigation, law enforcement investigations or increased scrutiny which may negatively affect our operations or financial strength or reduce profitability
13. 46We may not be able to protect our intellectual property and may be subject to infringement claims
14. 47Changing rules, public disclosure regulations and stakeholder expectations on environmental, social and corporate governance (“ESG”) related matters create a variety of risks for our business

Risks Relating to Our Indebtedness and Financing

1. 48We are a holding company and depend on distributions from our subsidiaries for cash
2. 49Risks Related to the Separation and Distribution and our Status as a Subsidiary of Fidelity National Financial, Inc. (“FNF”)
3. 50FNF is our principal shareholder and retains significant rights with respect to our governance and certain corporate actions. In certain cases, FNF may have interests which differ from our other shareholders
4. 51FNF is under no obligation to sell its remaining interest in us and retains the sole discretion to determine the timing of any future sales of shares of our common stock
5. 52Certain of our directors may have actual or potential conflicts of interest because of their FNF equity ownership or their current or former FNF positions
6. 53Provisions in our amended and restated certificate of incorporation and bylaws, and of Delaware law, may prevent or delay an acquisition of us, which could decrease the trading price of our common stock
7. 54These provisions apply even if an offer may be considered beneficial by some shareholders
8. 55We are a “controlled company” within the meaning of the New York Stock Exchange (“NYSE”) rules and, as a result, we qualify for, and rely on, exemptions from certain corporate governance requirements
9. 56FNF or F&G may fail to perform under various transaction agreements that were executed as part of the separation and distribution, or we may fail to have necessary systems and services in place when certain of the transaction agreements expire
10. 57We may have received better terms from unaffiliated third parties than the terms we received in our agreements with FNF
11. 58Our amended and restated bylaws contain an exclusive forum provision that could limit our shareholders’ ability to choose a judicial forum that they find favorable for certain disputes with us or our directors, officers, shareholders, employees or agents, and may discourage lawsuits with respect to such claims
12. 59We and certain of our subsidiaries file consolidated federal income tax returns with FNF

Risks Related to Our Common Stock and Preferred Stock

1. 60Our stock price may fluctuate significantly
2. 61If we are unable to implement and maintain the effectiveness of our internal control over financial reporting, our investors may lose confidence in the accuracy and completeness of our financial reports, which could adversely affect our stock price
3. 62Our common stock is subordinated to our preferred stock
4. 63Substantial sales of our common stock may occur which could cause our stock price to be volatile and to decline
5. 64We cannot guarantee the timing, amount or payment of dividends on our common stock or preferred stock in the future
6. 65Your percentage of ownership in F&G may be diluted in the future