F&G Annuities & Life (NYSE:FG) executives said the company closed 2025 with record assets under management and disciplined sales growth as it continues shifting toward “more fee-based, higher margin, and less capital-intensive” earnings streams, according to remarks on the company’s fourth-quarter and full-year earnings call.
Record AUM and sales mix highlighted in 2025 results
CEO Chris Blunt said F&G ended 2025 with record AUM before flow reinsurance of $73.1 billion, up 12% from year-end 2024, and record retained AUM of $57.6 billion, up 7%. Gross sales were $14.6 billion for the year, driven by $9.0 billion of “core” sales and $5.6 billion of “opportunistic” sales, he said.
- Indexed annuities: $6.7 billion for the year; $1.9 billion in the fourth quarter, up 12% year over year.
- Indexed universal life (IUL): $190 million for the year; over $50 million in the fourth quarter; up 14% versus 2024.
- Pension risk transfer (PRT): $2.1 billion for the year; over $800 million in the fourth quarter; the third consecutive year at $2 billion or more and within the company’s $1.5 billion to $2.5 billion annual target range.
- Funding agreements: $1.8 billion for the year, up nearly 80% from 2024, including nearly $300 million in the fourth quarter (compared with none in the prior-year quarter).
- MYGA: $3.8 billion for the year, down from $5.1 billion in 2024; over $350 million in the fourth quarter versus nearly $650 million a year earlier. Murphy said volumes were intentionally moderated due to market conditions, competitive dynamics, and pricing discipline.
Net sales retained were $10.0 billion in 2025, compared with $10.6 billion in 2024, Murphy said.
Investment portfolio performance and disclosure changes
Blunt said the retained portfolio remained high quality, with 97% of fixed maturities investment grade at year-end. He noted credit-related impairments of six basis points in 2025, which he said was below the company’s pricing assumption and consistent with a five-year average since 2021 of six basis points.
Fixed income yield was 4.65% in the fourth quarter, up six basis points from the fourth quarter of 2024, Blunt said. He also highlighted that the company has hedged most floating rate exposure, leaving $2.8 billion, or about 5% of the total portfolio net of hedging.
On alternative investments, Blunt said the annualized return was about 7% in the fourth quarter, below a 10% long-term expectation. At year-end, the company’s $11 billion alternative investment portfolio included about $4 billion (roughly 40%) in equity interests and about $7 billion (roughly 60%) in investment-grade fixed income debt. Beginning in the first quarter of 2026, F&G plans to update its long-term expected return for alternatives to reflect only the equity portion and reclassify the remaining fixed-income-like portion into fixed income yield and AUM. Management said the refinement is intended to improve comparability and will not affect adjusted net earnings as reported.
Variable investment income (prepayment fees) was $7 million pre-tax in the fourth quarter and $56 million for the full year, in line with 2024, Blunt said. He cautioned that prepayments fluctuate and could be a headwind in 2026 depending on market conditions.
Earnings and expanding fee-based contribution
Murphy said adjusted net earnings were $123 million, or $0.91 per share, in the fourth quarter, and $482 million, or $3.64 per share, for the full year. Alternative investment income was $65 million (or $0.47 per share) in the fourth quarter and $278 million (or $2.03 per share) for the year, below management’s long-term expected return in both periods. Full-year adjusted net earnings included three favorable significant items totaling $30 million, or $0.22 per share, which Murphy said were detailed in the financial supplement.
Murphy attributed year-over-year earnings performance to asset growth, growing fees from flow reinsurance, steady owned distribution margin, and operating expense discipline. Fee income from flow reinsurance was $56 million in 2025, up 37% from $41 million in 2024. Fee income from owned distribution margin was $47 million, up from $46 million in 2024. He said fee-based strategies, together with growing IUL product fees, contributed about 15% of adjusted net earnings (excluding significant items) in 2025, with a goal to reach about 25% by year-end 2028.
The company also reported that its operating expense ratio (operating expense to AUM before flow reinsurance) improved to 50 basis points at year-end 2025 from 60 basis points at year-end 2024. Murphy said management expects further improvement to approximately 45 basis points by year-end 2027 and noted the company aims to keep overall expenses “entirely flat” year over year from 2025 into 2026.
Capital actions, reinsurance transaction, and shareholder returns
Blunt and Murphy discussed a planned first-quarter 2026 transaction to sell F&G Life Re Limited, a Bermuda-based legal entity with affiliate-only reinsurance, to Anchin Financial Holdings LP, effective March 1. Murphy said the Iowa operating company recaptured about $900 million of affiliated statutory liabilities, with about $600 million ceded to an existing third-party reinsurance partner. The company expects net proceeds of about $300 million, including a $200 million dividend of assets paid at year-end 2025 from the Bermuda entity to the Iowa operating company. After closing, the company expects AUM to decrease by $1.9 billion, with foregone adjusted net earnings of about $10 million per quarter before redeploying proceeds.
Murphy said the company ended the year with an estimated RBC ratio of about 430% for its primary operating subsidiaries, above its 400% target, boosted by the year-end recapture from the Bermuda entity. The company’s annualized interest expense was approximately $165 million on $2.3 billion of total debt outstanding, and management reiterated a long-term target of about 25% debt-to-capitalization (excluding AOCI). During 2025, F&G returned $137 million to shareholders through common and preferred dividends, and Murphy noted the company increased its quarterly common dividend by 14% in the fourth quarter.
Management comments on valuation, portfolio exposures, and 2026 considerations
During Q&A, Blunt said software exposure in the investment portfolio was “quite manageable” at less than 5% of the total portfolio, and that less than 1% carried potential disruption risk. He also said the company believes there is “tremendous upside” in the private equity portfolio.
On alternative investment returns, management reiterated its long-term expectation but said it plans conservatively. Murphy said the blended long-term expected return remains around 10% and that the upcoming reclassification change should not alter the overall blended return outlook. Blunt added that planning assumes “continued, mediocre returns,” while noting encouraging signs such as more IPOs and transaction activity.
Murphy also addressed the impact of elevated annuity terminations, saying the company expects surrender-related fee income to be lower in 2026 than 2025, and suggested a potential decline of roughly 20%, while emphasizing that outcomes depend on external factors such as interest rates and industry suitability rules. Blunt noted that multiple moving parts—including private equity realizations and surrender activity—can offset one another.
Blunt also said F&G’s public float increased following a distribution by majority owner Fidelity National Financial, with FNF distributing about 12% of F&G’s outstanding shares to FNF shareholders and retaining about 70% ownership. Management said the move increased public float from about 18% to about 30% and was intended to improve liquidity and broaden investor access.
Looking to 2026, management reiterated its focus on growing core products, building scale benefits, and continuing the shift toward fee-based earnings while maintaining pricing discipline and capital flexibility.
About F&G Annuities & Life (NYSE:FG)
F&G Annuities & Life is the principal life insurance and annuity subsidiary of F&G Financial Group, Inc (NYSE: FG), a publicly traded financial services holding company headquartered in Des Moines, Iowa. The company focuses on designing and issuing retirement income solutions that address longevity risk, capital preservation, and wealth transfer for individual and institutional clients.
Its product suite includes fixed indexed annuities, which offer the potential for market-linked growth with downside protection; fixed-rate annuities, delivering guaranteed interest over a defined term; and a range of life insurance policies such as term, universal, and variable universal life.
