F&g Annuities & Life (FG 6.64%), a major provider of annuities and life insurance serving both retail and institutional clients, reported its financial results for the second quarter of fiscal 2025 on August 6, 2025. The headline news: adjusted earnings per share came in at $0.77, topping analyst expectations of $0.62 (Non-GAAP). Despite outperforming forecasts, the company posted steep year-over-year declines in both adjusted and net profits, as well as lower sales outside its record retail channel. The quarter highlighted robust asset growth and distribution expansion, offset by pressure on profitability and institutional sales.
| Metric | Q2 2025 | Q2 2025 Estimate | Q2 2024 | Y/Y Change |
|---|---|---|---|---|
| EPS (Non-GAAP) | $0.77 | $0.62 | $1.10 | (30.0%) |
| Revenue (GAAP) | $1.36 billion | $1.18 billion | $1.17 billion | 16.4% |
| Net Earnings per Diluted Share (GAAP) | $0.26 | $1.55 | (83.2%) | |
| Adjusted Return on Average Equity (ex. AOCI) | 8.8% | 8.4% | 0.4 pp | |
| Assets Under Management before Flow Reinsurance | $69.2 billion | $61.4 billion | 12.7% |
Source: Analyst estimates for the quarter provided by FactSet.
Business Overview and Strategic Direction
F&g Annuities & Life (FG 6.64%) specializes in a range of retirement and life insurance products. These solutions support clients in income planning, wealth protection, and estate management. The firm's main product lines include indexed annuities, fixed rate annuities, and indexed universal life insurance, sold through a growing network of retail and institutional channels.
In recent years, the company has focused on expanding its distribution channels. From a single primary route, it now works with independent agents, banks, and broker-dealers, driving strong growth in assets under management. Financial strength, credit discipline, and strategic partnerships—most notably with Blackstone for investment management—are central to its business model. Product diversification and regulatory compliance remain key to long-term success.
Quarter in Review: Retail Strength and Margin Pressure
The company posted a marked increase in assets under management before flow reinsurance, reaching $69.2 billion, up 13% from the prior year. This growth was underpinned by record retail channel sales of $3.6 billion, a 13% increase. Indexed annuity sales were $1.7 billion, up 3% compared to the second quarter of 2024. Fixed rate annuities, specifically multiyear guaranteed annuities, rose 29% to $1.9 billion compared to the second quarter of 2024. Indexed universal life insurance sales increased 20% to $53 million compared to the second quarter of 2024.
In contrast, institutional segment sales—products like pension risk transfer solutions and funding agreements—dropped to $0.5 billion, compared with $1.2 billion in Q2 2024. Funding agreement volumes were especially weak, falling to zero from $0.9 billion in Q2 2024. Total gross sales slid 7% year over year, Net sales (non-GAAP) declined 20.6% compared to the second quarter of 2024. Management attributed the sales mix shift away from institutional toward retail to prioritizing capital allocation to higher-returning business and adjusting sales based on market economics.
The revenue figure (GAAP) topped analyst expectations. Still, headline profits (GAAP net earnings attributable to common shareholders) fell sharply compared to the prior year, and GAAP net income per share dropped more than 83% compared to Q2 2024. Part of the earnings decline reflected lower investment returns on alternative assets, as well as fewer net institutional flows. Volatile non-recurring items, like mark-to-market portfolio adjustments, also affected reported results. Alternative investment income was $83 million, below the company’s long-term return expectations.
Expense management emerged as a bright spot. The ratio of operating expenses to assets under management before flow reinsurance declined by 5 basis points compared to Q2 2024. Book value per share, excluding accumulated other comprehensive income (AOCI), climbed 2% to $43.39 compared to the second quarter of 2024. The adjusted return on average equity, excluding AOCI, improved to 8.8%, a 0.4 percentage point increase from Q2 2024.
Products, Channel Developments, and One-Time Events
The core retail business centers on annuities—long-term savings contracts offering guaranteed income—and indexed universal life insurance, which combines a death benefit with cash value growth tied to equity indexes. Retail channel momentum reflected the success of new market entries and owned distribution strategies. The company reached new records in both indexed universal life and multiyear guaranteed annuity sales, reinforcing the role of product expansion in driving growth.
Institutional product flows, such as pension risk transfer deals (which help companies offload pension liabilities) and funding agreements (short-term, high-volume lending products), exhibited more volatility. While pension risk transfer sales rose to $445 million from $338 million in Q2 2024, funding agreements fell completely out of the product mix. Management described these swings as normal for opportunistic, rate-sensitive segments.
Asset quality remained strong, with 97% of fixed maturity securities classified as investment grade. Credit-related impairment rates averaged 6 basis points over the past five years, remaining below pricing assumptions. The partnership with Blackstone has been pivotal in maintaining this level of portfolio quality and disciplined asset allocation.
Capital returns continued, with $35 million paid to shareholders in common and preferred dividends, compared to $32 million in the second quarter of 2024, a 9.4% increase. No material one-time charges or extraordinary items affected the quarter outside the expected mark-to-market portfolio adjustments and weaker alternative investment results. The company’s regulatory capital ratios as measured by the risk-based capital (RBC) metric remained well above the minimum requirements.
Looking Ahead: Outlook and Key Areas to Watch
Management expressed confidence in achieving its medium-term strategic targets, building on distribution expansion, cost discipline, and a shift toward more fee-based and higher margin business. It expects further improvement in expense ratios through the remainder of the year. However, leadership did not offer formal forward guidance on revenue or net earnings for upcoming periods.
Volatility in results tied to alternative investments and institutional flows will remain key risks for the near term. $35 million was paid in aggregate for common and preferred dividends, up from $32 million in the second quarter of 2024.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
