Business Context and Reporting Period
Company: F&G Annuities & Life, Inc. (F&G)
Filing Type: Form 10-K (Annual Report)
Reporting Period: Fiscal year ended December 31, 2025
Business Overview: F&G is a leading provider of insurance solutions, primarily serving retail annuity and life customers and institutional clients. The company operates through three retail channels (Independent Marketing Organizations, banks, and broker-dealers) and two institutional markets (Pension Risk Transfer and Funding Agreements). F&G is a majority-owned subsidiary of Fidelity National Financial, Inc. (FNF), which retained approximately 70% ownership following a December 2025 distribution.
Key Financial Metrics
| Metric | 2025 | 2024 | 2023 |
|---|---|---|---|
| Total Revenues | $5,731 million | $5,744 million | $4,500 million |
| Net Earnings (GAAP) | $271 million | $642 million | $(58) million |
| Net Earnings Attributable to Common Shareholders | $248 million | $622 million | $(58) million |
| Adjusted Net Earnings (Non-GAAP) | $482 million | $546 million | $335 million |
| Adjusted ROA (Non-GAAP) | 87 basis points | 106 basis points | 73 basis points |
| Assets Under Management (AUM) | $57.6 billion | $53.5 billion | $46.0 billion |
| Gross Sales | $14.6 billion | $15.3 billion | $13.2 billion |
| Total Debt Outstanding | $2.27 billion | $2.20 billion | $1.85 billion |
| Cash and Cash Equivalents | $1.49 billion | $2.26 billion | $1.56 billion |
Material Changes vs. Prior Period
- Revenue Stability: Total revenues remained relatively flat at $5.73 billion in 2025 compared to $5.74 billion in 2024, despite a slight decrease in gross sales ($14.6 billion vs. $15.3 billion). This stability was driven by higher interest and investment income ($2.84 billion vs. $2.72 billion) and growth in owned distribution revenues ($89 million vs. $81 million).
- Earnings Decline: GAAP net earnings attributable to common shareholders decreased significantly to $248 million in 2025 from $622 million in 2024. This decline was primarily due to increased market risk benefit losses ($167 million loss vs. $25 million gain) and higher recognized losses on derivatives and investments.
- Investment Portfolio Growth: Total investments increased to $69.4 billion in 2025 from $60.1 billion in 2024, reflecting net new business flows and asset growth. The portfolio yield on Average Assets Under Management (AAUM) decreased slightly to 5.12% from 5.27%.
- Debt Activity: The company issued $375 million of 7.300% Junior Subordinated Notes in January 2025 and redeemed $300 million of 5.50% Senior Notes in February 2025. Total notes payable increased to $2.27 billion.
- Dividend Capacity: FGL Insurance, the primary operating subsidiary, did not pay dividends to its parent in 2025, and its estimated maximum ordinary dividend capacity for 2026 is $0 due to regulatory limitations.
Guidance, Outlook, and Risks
- Strategic Outlook: Management continues to focus on transforming into a more fee-based, higher margin, and less capital-intensive business. The company aims to grow AUM and expand adjusted ROA, leveraging its position as a top seller of annuities and life insurance.
- Interest Rate Environment: The company notes that interest rates have declined from their 2023 peaks, with the Fed Funds rate at approximately 3.75%–4.00% by late 2025. While this environment supports asset values, it may pressure spreads on new business if crediting rates do not adjust downward as quickly as investment yields.
- Key Risks:
- Regulatory: Ongoing litigation regarding the Department of Labor's "New Fiduciary Rule" remains a significant uncertainty, with appeals dismissed and cases remanded to District Courts as of late 2025.
- Cybersecurity: The company references the June 2023 MOVEit incident involving a third-party vendor, which resulted in two putative class-action lawsuits. Management does not currently believe these will have a material impact.
- Reinsurance Counterparty Risk: Significant exposure exists to reinsurers such as Aspida ($8.6 billion recoverable) and Somerset ($5.1 billion recoverable). A failure of these counterparties could materially impact financial condition.
- Investment Valuation: The company holds significant unrealized losses in its fixed maturity portfolio ($3.18 billion gross unrealized loss as of Dec 31, 2025), primarily driven by interest rate movements rather than credit concerns.
- Subsidiary Sale: On February 19, 2026, the company announced the expected sale of its Bermuda-based subsidiary, F&G Life Re, to Ancient Financial Holdings, LP, with completion expected March 1, 2026.
Investor Verification Checklist
- Dividend Sustainability: Verify the impact of FGL Insurance's $0 dividend capacity for 2026 on the holding company's ability to fund future common stock dividends.
- Reinsurance Concentration: Review the credit ratings and collateral arrangements for top reinsurers (Aspida, Somerset, Everlake) given the high concentration of recoverables.
- Unrealized Losses: Assess the liquidity implications of the $3.18 billion gross unrealized loss in the fixed maturity portfolio and the company's strategy for managing potential disintermediation in a rising rate environment.
- Regulatory Litigation: Monitor the status of the DOL "New Fiduciary Rule" litigation and potential impacts on distribution channels and compliance costs.
- Non-GAAP Adjustments: Scrutinize the reconciliation between GAAP net earnings ($248 million) and Adjusted Net Earnings ($482 million), specifically the treatment of market risk benefit losses and derivative fair value changes.