The end of an earnings season can be a great time to discover new stocks and assess how companies are handling the current business environment. Let’s take a look at how F&G Annuities & Life (NYSE: FG) and the rest of the life insurance stocks fared in Q2.
Life insurance companies collect premiums from policyholders in exchange for providing a future death benefit or retirement income stream. Interest rates matter for the sector (and make it cyclical), with higher rates allowing insurers to reinvest their fixed-income portfolios at more attractive yields and vice versa. Additionally, favorable demographic shifts, such as an aging population, are driving strong demand for retirement products while AI and data analytics offer significant opportunities to improve underwriting accuracy and operational efficiency. Conversely, the industry faces headwinds from persistent competition from agile insurtechs that threaten traditional distribution models.
The 15 life insurance stocks we track reported a slower Q2. As a group, revenues beat analysts’ consensus estimates by 0.8%.
Thankfully, share prices of the companies have been resilient as they are up 5.7% on average since the latest earnings results.
F&G Annuities & Life (NYSE: FG)
Founded in 1959 and serving approximately 677,000 policyholders who rely on its financial protection products, F&G Annuities & Life (NYSE: FG) provides fixed annuities, life insurance, and pension risk transfer solutions to retail and institutional clients.
F&G Annuities & Life reported revenues of $1.35 billion, up 12.6% year on year. This print exceeded analysts’ expectations by 13.8%. Overall, it was a very strong quarter for the company with a beat of analysts’ EPS estimates and an impressive beat of analysts’ net premiums earned estimates.
Chris Blunt, F&G's Chief Executive Officer, said, "We grew AUM before flow reinsurance to $69.2 billion at the end of the second quarter, an increase of 13% from second quarter 2024, driven by strong sales. Our business is benefiting from increased scale, as our ratio of operating expense to AUM before flow reinsurance has decreased by 5 basis points from the second quarter of 2024, and we expect further improvement in the second half of the year. Our high quality investment portfolio is performing well and credit related impairments remain below our pricing assumption. Overall, we have had tremendous growth since FNF acquired F&G in June 2020, with a cumulative 58% increase in book value per share excluding AOCI since year-end 2020, to $43.39 at the end of the second quarter."
F&G Annuities & Life achieved the biggest analyst estimates beat and fastest revenue growth of the whole group. Unsurprisingly, the stock is up 4.3% since reporting and currently trades at $34.57.
Best Q2: Corebridge Financial (NYSE: CRBG)
Spun off from insurance giant AIG in 2022 to focus on the growing retirement market, Corebridge Financial (NYSE: CRBG) provides retirement solutions, annuities, life insurance, and institutional risk management products in the United States.
Corebridge Financial reported revenues of $4.43 billion, up 6.1% year on year, outperforming analysts’ expectations by 7.6%. The business had a stunning quarter with a beat of analysts’ EPS estimates.
However, the results were likely priced into the stock as it’s traded sideways since reporting. Shares currently sit at $34.77.
Is now the time to buy Corebridge Financial? Access our full analysis of the earnings results here, it’s free.
Weakest Q2: Brighthouse Financial (NASDAQ: BHF)
Spun off from MetLife in 2017 to focus specifically on retail financial products, Brighthouse Financial (NASDAQ: BHF) provides annuity contracts and life insurance products designed to help individuals protect wealth, generate income, and transfer assets.
Brighthouse Financial reported revenues of $2.15 billion, down 2.9% year on year, falling short of analysts’ expectations by 1.3%. It was a disappointing quarter as it posted a significant miss of analysts’ net premiums earned estimates and a significant miss of analysts’ EPS estimates.
Interestingly, the stock is up 1.2% since the results and currently trades at $46.75.
Read our full analysis of Brighthouse Financial’s results here.
MetLife (NYSE: MET)
Founded in 1863 by a group of New York businessmen during the Civil War era, MetLife (NYSE: MET) is a global financial services company that provides insurance, annuities, employee benefits, and asset management services to individuals and businesses worldwide.
MetLife reported revenues of $17.92 billion, down 4.1% year on year. This print missed analysts’ expectations by 3.9%. It was a softer quarter as it also produced a significant miss of analysts’ book value per share estimates and a significant miss of analysts’ EPS estimates.
The stock is up 7% since reporting and currently trades at $81.36.
Read our full, actionable report on MetLife here, it’s free.
Equitable Holdings (NYSE: EQH)
Tracing its roots back to 1859 as one of America's oldest financial institutions, Equitable Holdings (NYSE: EQH) provides retirement planning, asset management, and life insurance products through its two main franchises, Equitable and AllianceBernstein.
Equitable Holdings reported revenues of $4.03 billion, up 11.4% year on year. This result surpassed analysts’ expectations by 1.3%. More broadly, it was a softer quarter as it logged a significant miss of analysts’ EPS estimates.
The stock is up 3.7% since reporting and currently trades at $52.80.
Read our full, actionable report on Equitable Holdings here, it’s free.
Market Update
The Fed’s interest rate hikes throughout 2022 and 2023 have successfully cooled post-pandemic inflation, bringing it closer to the 2% target. Inflationary pressures have eased without tipping the economy into a recession, suggesting a soft landing. This stability, paired with recent rate cuts (0.5% in September 2024 and 0.25% in November 2024), fueled a strong year for the stock market in 2024. The markets surged further after Donald Trump’s presidential victory in November, with major indices reaching record highs in the days following the election. Still, questions remain about the direction of economic policy, as potential tariffs and corporate tax changes add uncertainty for 2025.
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