Corebridge Financial, Inc. — 2023 Form 10-K
Reporting period: Fiscal year ended December 31, 2023. This is an annual filing; it does not provide a standalone fourth-quarter summary. Corebridge is a U.S.-focused retirement solutions and life insurer with Individual Retirement, Group Retirement, Life Insurance and Institutional Markets businesses.
Financial performance
| Metric | 2023 | 2022 |
|---|---|---|
| Total revenue (GAAP) | $18.878 billion | $24.697 billion |
| Adjusted revenue (non-GAAP) | $21.212 billion | $17.955 billion |
| Net income attributable to Corebridge | $1.104 billion | $8.159 billion |
| Adjusted pre-tax operating income (APTOI, non-GAAP) | $3.193 billion | $2.854 billion |
| Adjusted after-tax operating income attributable to common shareholders (non-GAAP) | $2.647 billion | $2.371 billion |
| Net cash from operating activities | $3.357 billion | $2.621 billion |
| Total assets | $379.270 billion | $360.322 billion |
| Long-term debt | $9.118 billion | $7.868 billion |
| Cash and restricted cash at year-end | $628 million | $633 million |
GAAP results include substantial market-driven and reinsurance-related items; APTOI and adjusted income are non-GAAP measures and should be read alongside GAAP results. Corebridge reported a $96 million income tax benefit for 2023, versus $2.012 billion of tax expense in 2022.
Net investment income rose to $11.078 billion from $9.576 billion. Interest credited to policyholder account balances increased to $4.427 billion from $3.732 billion. Corebridge reported $7.303 billion in spread income, fee income and underwriting margin combined, compared with $6.792 billion in 2022.
2023 APTOI by segment: Individual Retirement $2.312 billion; Group Retirement $754 million; Life Insurance $373 million; Institutional Markets $379 million; and Corporate and Other loss of $625 million. Individual Retirement was the largest contributor.
Liquidity, capital and balance sheet
- Corebridge Parent and non-regulated intermediate holding companies reported $4.091 billion of liquidity sources, including $1.591 billion of cash and short-term investments and a $2.5 billion committed revolving facility. These are holding-company figures, not unrestricted cash for the entire group.
- Corebridge paid $1.722 billion in common dividends and repurchased about 26.5 million shares for approximately $498 million during 2023. The company reported $502 million remaining under its $1 billion repurchase authorization at year-end.
- Insurance subsidiaries reported $15.219 billion of statutory capital and surplus. Management said the Life Fleet RBC ratio was expected to exceed its 400% target; the filing states all insurance subsidiaries exceeded regulatory minimum capital requirements.
- Financial debt was approximately $9.368 billion, comprising $250 million of short-term debt and $9.118 billion of long-term debt. An additional $2.504 billion of consolidated investment-entity debt was described as generally non-recourse to Corebridge.
- Fixed-maturity securities held by insurance operating subsidiaries, excluding Fortitude Re funds-withheld assets, were reported as 95% investment grade. The portfolio remains exposed to interest rates, credit, commercial real estate and asset-liquidity risks.
Material changes and unusual items
- GAAP net income fell sharply from 2022, when results included a $6.347 billion gain on the Fortitude Re funds-withheld embedded derivative. In 2023, that derivative generated a $1.734 billion loss. Corebridge explains that this accounting volatility is largely offset in other comprehensive income; the Fortitude-related comprehensive income was $25 million in 2023 versus $340 million in 2022.
- Adjusted APTOI increased by $339 million. Higher investment income and new pension risk-transfer business contributed, while higher policyholder benefits and interest credited, and lower variable-account fee income, partly offset the gains.
- Net income attributable to Corebridge was $1.104 billion, while comprehensive income attributable to Corebridge was $4.509 billion. Other comprehensive income improved to $3.416 billion from a $25.106 billion loss in 2022, primarily reflecting investment-value movements.
- Corebridge adopted long-duration targeted improvements (LDTI) accounting in 2023, with a January 1, 2021 transition date. The filing notes that this changed reported insurance liabilities, market risk benefits and comparability with earlier presentations.
- Corebridge completed the sale of Laya Healthcare to AXA on October 31, 2023, receiving €691 million in gross proceeds and recording a $652 million pre-tax gain. The sale of AIG Life to Aviva, for £460 million subject to adjustments, was pending regulatory approval and expected to close in the first half of 2024.
- Management’s Corebridge Forward initiative targets about $400 million of annual run-rate expense reductions. Approximately $351 million of savings had been acted upon or contracted by year-end; costs to achieve were about $168 million, against an estimated total of approximately $300 million.
Outlook, commentary and risks
Management cites demographic growth and rising demand for retirement income and protection products as long-term opportunities. It also says higher rates supported fixed and fixed-index annuity sales and new investment yields, but increased surrenders and can pressure fee income, asset values and liquidity. Individual Retirement annuity premiums and deposits rose to $18.171 billion from $15.120 billion, while its net flows were only $333 million; Group Retirement net outflows widened to $6.302 billion.
The filing does not provide a clear numeric earnings or revenue forecast. Corebridge says it intends to pursue disciplined, risk-adjusted growth, expand institutional and advisory businesses, and continue expense-reduction and technology initiatives. Outcomes depend on interest rates, credit spreads, equity and real-estate markets, policyholder behavior, mortality and longevity, investment performance, and regulation.
- Reinsurance: $26.8 billion of Corebridge liabilities were ceded to Fortitude Re. The balances are collateralized under funds-withheld arrangements, but Corebridge remains liable to policyholders and could face material effects if collateral proves inadequate or business is recaptured.
- Market and investment risk: Rate or equity-market changes can affect asset values, spreads, surrender activity, fees and guaranteed-benefit liabilities. Hedging may not fully offset these exposures. The filing reports $20.477 billion of gross unrealized losses on available-for-sale fixed maturities at year-end.
- Governance and separation: AIG owned approximately 52.2% of Corebridge at year-end and retained significant influence. Corebridge also faces costs and execution risks as it replaces AIG-provided services and completes its separation.
- Regulatory, legal and technology risks: The filing discusses evolving fiduciary and cybersecurity requirements, the proposed DOL fiduciary rule, and litigation including the Moriarty California insurance case. A vendor, Pension Benefit Information, reported a 2023 data incident affecting Corebridge customer data; management did not then expect a material adverse effect but was still assessing the impact.
- Audit and controls: PwC issued an unqualified opinion on the financial statements and concluded internal control over financial reporting was effective. Critical audit matters included valuation of Level 3 fixed-maturity securities and market risk benefits and embedded derivatives.
Important facts for investors to verify
- Reconcile the 2023 GAAP decline with adjusted operating results, especially Fortitude Re embedded-derivative effects and the treatment of other excluded items.
- Track annuity surrenders, net flows and persistency, particularly the increase in Individual Retirement fixed-annuity surrender rates and Group Retirement outflows.
- Review statutory capital, dividend capacity and holding-company liquidity, including restrictions on upstreaming subsidiary funds and the expected Life Fleet RBC ratio.
- Assess investment-portfolio credit quality, unrealized losses, commercial real-estate exposures and the liquidity of private and other less-liquid assets.
- Monitor Fortitude Re collateral and recapture triggers, the AIG Life sale closing, expense-savings delivery and separation costs, and the potential effects of legal, tax and regulatory developments.