What Management Said
Read the full Q2 2026 transcript ↗The reconciliation of such measures to the most comparable GAAP figures is included in our earnings release, financial supplement, and earnings presentation, all of which are available on our website at investors.corebridgefinancial.com. Turning to the second quarter highlights, we delivered strong results consistent with our full-year guidance. Consistent with guidance, our adjusted return on equity, excluding VII, was up 90 basis points year-over-year to 10.9%. 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%.
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 growth by 4% year-over-year. This is a testament to our product depth and commitment to margin integrity across cycles. In the quarter, our wealth management assets rose to $20 billion, an 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.
In the quarter, we delivered run rate earnings above our typical guide, reflecting strong underwriting results. Our GIC book represents 5% of our general account, compared to 10%-15% for major competitors, demonstrating ample room for additional growth. The appetite for de-risking solutions remains strong, and we expect the double-digit reserve growth we've achieved since 2021 to continue. Despite this growth, new Corebridge research finds that only 28% of people are confident spending in retirement, with fears of running out of money being the top concern.
What went well
- Shareholders approved the merger with Equitable, and management reiterated the transaction is on track to close by year-end, with the combined company targeting $5 billion of earnings, $4 billion of cash generation, and a return on equity above 15% by 2027, supported by $500 million of cost synergies.
- Core sources of income (excluding variable investment income) rose 5% year over year, run-rate operating EPS increased 16% to $1.35, and adjusted ROE excluding VII improved 90 basis points to 10.9%.
- Cash generation remained strong, exceeding $400 million for a 14th consecutive quarter, and the company returned $412 million to shareholders (including $300 million of buybacks) for an 84% year-to-date payout ratio.
- Institutional Markets was a standout, with adjusted pre-tax operating income up 36% year over year, $1.8 billion of GIC issuances, a 17% reserve expansion, and ample runway (GICs are only 5% of the general account versus 10%-15% at major peers).
- The Life segment grew sales to $870 million with strong, favorable mortality, delivering run-rate APTOI $122 million above the top end of guidance, and Group Retirement fee income rose 15% with wealth management assets up 18% to $20 billion.
- Individual Retirement momentum resumed as yields rose, making June the strongest sales month of the year, with fee income up 17% and positive net flows continuing.
What went wrong
- On a GAAP basis, the company reported a net loss available to common shareholders of $16 million, or $(0.04) per share, driven by non-operating items such as realized losses and reinsurance-related effects.
- Operating EPS of $1.12 declined from $1.22, adjusted after-tax operating income fell to $512 million from $672 million, and adjusted pre-tax operating income dropped to $664 million from $842 million, primarily on variable investment income underperformance.
- Variable investment income (mainly private-equity marks) came in below long-term targets amid a software-sector decline and geopolitical volatility, and management expects VII to remain below target for the rest of the year.
- Premiums and deposits fell 13% to $9.1 billion, primarily on lower fixed and fixed-index annuity sales plus the lumpy pension risk transfer market.
- Individual Retirement sales of $3.8 billion declined both year over year and sequentially as the company prioritized margin integrity over volume amid tighter competition, and segment APTOI was flat.
- Group Retirement APTOI fell 7% on lower spread income (general-account outflows from the demographic mix shift), with base spread compression expected to continue through the end of 2026.
Guidance Changes
| Metric | Period | Current guidance |
|---|---|---|
| Individual Retirement base spread income | FY2026 | ~$2.55 billion (reaffirmed); single-digit spread compression continuing, bottoming at end of 2026 |
| Variable investment income | H2 2026 | Expected to remain below long-term target for the remainder of the year |
| Share repurchases | H2 2026 | ~$350 million (approximately $1.9 billion for full-year 2026; over $4 billion across 2025-2026) |
| Pension risk transfer | H2 2026 | Activity expected to be weighted to the back half, with double-digit reserve growth continuing |
| Combined company (post-merger) | 2027 | $5 billion earnings, $4 billion cash generation, ROE >15%, $500 million cost synergies |
| Merger close | By year-end 2026 | On track; shareholder vote approved, antitrust and FINRA approvals complete, state/international filings submitted |
Performance Breakdown
| Metric | YoY | Note |
|---|---|---|
| Operating EPS | $1.12 (vs $1.22); run-rate $1.35 (+16%) | VII underperformance weighed on reported operating EPS; run-rate (normalizing alternatives) rose 16%. |
| Adjusted after-tax operating income | $512M (vs $672M) | Lower variable investment income; adjusted pre-tax operating income $664 million versus $842 million. |
| GAAP net loss / EPS | $(16)M / $(0.04) | Non-operating realized losses and reinsurance-related items; improved from a $(660) million loss a year ago. |
| Core sources of income | $1,568M (+5%) | Base spread income $898M (+4%, asset repositioning and business growth) and fee income +15% (higher AUMA and market tailwinds); underwriting margin -1%. |
| Adjusted ROE | 11.4% (13.8% run-rate) | Excluding VII, up 90 bps to 10.9%; within the 12%-14% targeted range on a run-rate basis. |
| Premiums and deposits | $9.1B (-13%) | Lower fixed and fixed-index annuity sales and lumpy PRT; total sales up 13% sequentially and up 4% on a rolling-12-month basis. |
| Institutional Markets APTOI | +36% | 17% reserve expansion and 12% AUMA growth; $1.8 billion of GIC issuances; $2.6 billion of segment sales. |
| Life Insurance sales / APTOI | Sales $870M (up); run-rate APTOI $122M above guide | Favorable mortality and underwriting; automated underwriting on 80%+ of new business. |
Earnings Call Themes & Trends
| Topic | Previous mention | Current period | Trend |
|---|---|---|---|
| Equitable merger | Announced | Shareholder vote approved; antitrust and FINRA clearances complete, state/international filings submitted, first three org levels set; on track to close by year-end with 2027 targets of $5B earnings, $4B cash, >15% ROE, and $500M cost synergies, plus revenue-synergy upside (e.g., VUL product adoption). | — |
| Variable investment income / alternatives | Below target early in Q2 | PE marks drove the miss (software decline, geopolitics) with a large unrealized-gain backlog not yet realized; alternatives are under 3% of the balance sheet, matched to long-tail liabilities; expected below target for the rest of 2026. | — |
| Capital allocation and dynamic distribution | Judicious allocator | Management shifts capital across retail and Institutional Markets to the best risk-adjusted returns (leaning into Institutional in Q2 as retail was competitive), prioritizing margin integrity over volume. | — |
| Institutional Markets growth | Growth engine | GIC/FABN book only 5% of the general account (versus 10%-15% at peers) offers a long runway, and PRT activity is expected to be back-half weighted with continued double-digit reserve growth; the combined balance sheet should enable larger PRT case sizes. | — |
| Life growth and mortality | Top-tier term provider | Sustained favorable mortality and a goal to roughly double sales over time by improving distribution connectivity and becoming easier to do business with; the merger adds a VUL product chassis. | — |
| Investment portfolio repositioning | High quality (A-, 96% IG) | Sold lower-yielding high yield, EM, and private assets and rotated into investment-grade public assets, RMBS, and private ABS (over half single-A or higher), raising yield while maintaining or improving credit quality; positive credit migration continues. | — |
| Origination and Japan optionality | Blackstone/BlackRock partnerships | AllianceBernstein will add ~$100 billion of AUM over time (complementary to a $92.5 billion Blackstone mandate), and early-stage (third/fourth-inning) discussions with Nippon Life on co-manufacturing Japanese annuities are progressing. | — |
Q&A Summary
Ryan Krueger (KBW) asked what changed in retail annuity competitive dynamics during the quarter.
Marc Costantini said competitive tension rose in simpler product designs, so Corebridge leaned into more attractive Institutional Markets opportunities as a judicious capital allocator; retail momentum returned as yields rose, making June the strongest sales month and carrying into July, with a Q3 retail rebound expected alongside continued Institutional strength.
Ryan Krueger (KBW) asked why base spread income guidance was reaffirmed at ~$2.55 billion despite opportunistic repositioning gains.
Chris Filiaggi said that while base spread improved as the book rolls off, single-digit spread compression is still expected over the next couple of quarters, bottoming at the end of 2026, so the guidance was reiterated rather than raised.
Suneet Kamath (Jefferies) asked about a below-peer expense ratio advantage and whether Corebridge's outlook on alternatives is uniquely conservative.
Costantini pointed to $500 million-plus of merger cost savings and scale-driven efficiency as durable advantages; on alternatives, he and CIO Lisa Longino explained that PE marks (not real estate or hedge funds this quarter) drove the miss amid weak markets and few realizations, so returns should stay below long-term expectations this year despite possible positive second-half returns.
Joel Hurwitz (Dowling & Partners) asked about the base-spread repositioning actions and whether Corebridge would draw down excess capital for buybacks.
Longino described proactive, credit-neutral rotation into higher-yielding assets; Filiaggi said that despite ~$1.4 billion of excess holding-company capital, Corebridge remains committed to ~$350 million of second-half buybacks (about $1.9 billion for 2026), with capital-return levels to be revisited for the combined company at an investor day.
Tom Gallagher (Evercore) asked whether institutional growth is opportunistic or a bigger runway, and for an update on the Nippon Life Japan collaboration.
Costantini said Institutional Markets has significant upside (FABN only ~5% of the balance sheet versus 10%-15% at peers), with more demand expected post-merger and back-half PRT opportunities; the Nippon Life discussions on co-manufacturing Japanese annuities are in the 'third or fourth inning' and moving in a good direction, though timing remains early.
Joshua Shanker (Bank of America) asked whether PRT is now a back-half-weighted business and whether bidding is already underway.
Costantini said 2026 PRT activity is weighted to the back half (with lighter first-half industry activity enhancing the second half), that pipelines take four to six months to build against well-funded plans and attractive rates, and that processes are at varying maturity levels with Corebridge feeling good about winning its targeted case sizes.
More on Corebridge Financial, Inc.
Reported 2026-08-05 · figures from the Corebridge Financial, Inc. Q2 2026 earnings call.
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