American National Group Inc. (ANGI) - Q1 2026 10-Q Summary
Business Context and Reporting Period
This Form 10-Q covers the quarterly period ended March 31, 2026. American National Group Inc. operates through two primary segments: Annuities and Life Insurance. The Company is a wholly-owned subsidiary of Brookfield Wealth Solutions Ltd. Notably, the Company completed the transfer of its Property & Casualty (P&C) subsidiaries to Clearbrook Group Holdings Inc. on October 1, 2025; consequently, P&C results are reported as discontinued operations.
Key Financial Metrics
| Metric (in millions) | Q1 2026 | Q1 2025 |
|---|---|---|
| Total Revenues | $1,600 | $1,889 |
| Net Investment Income | $1,289 | $1,251 |
| Net Income (Loss) | $3 | $(203) |
| Net Loss Attributable to Common Stockholders | $(7) | $(236) |
| Distributable Operating Earnings (DOE) | $402 | $439 |
| Total Assets | $130,406 | $123,434 |
| Cash and Cash Equivalents | $8,934 | $7,023 |
| Long-Term Borrowings | $2,954 | $2,951 |
Note: DOE is a Non-GAAP measure used by management to assess operating performance.
Material Changes vs. Prior Period
- Net Premiums: Decreased significantly to $145 million from $458 million in Q1 2025. This $313 million decline is primarily attributed to a smaller Pension Risk Transfer (PRT) market in 2026.
- Net Investment Income: Increased by $38 million to $1,289 million, driven by a larger asset base and a strategic rotation into higher-yielding investment strategies.
- Investment Gains/Losses: Shifted from a $3 million gain in Q1 2025 to a $30 million loss in Q1 2026, largely due to unrealized losses on equity securities.
- Policyholder Benefits: Decreased by $371 million to $231 million, reflecting lower reserve changes associated with reduced PRT sales.
- Market Risk Benefits (MRB): The expense associated with the change in fair value of MRB decreased by $222 million to $139 million, driven by favorable movements in interest rates and equity markets.
- Effective Tax Rate: The effective tax rate was 85.0% in Q1 2026 compared to 21.3% in Q1 2025. The higher rate is due to permanent differences relative to low pre-tax income, including changes to Bermuda deferred tax assets.
Guidance, Outlook, and Risks
Management Commentary: Management highlights that while GAAP net income was impacted by mark-to-market volatility, the core business remains profitable with Distributable Operating Earnings (DOE) of $402 million. The Annuities segment generated $382 million in DOE, while Life Insurance generated $20 million. Gross annuity sales remained consistent at $3.8 billion, with growth in fixed-rate products offsetting the decline in PRT sales.
Liquidity: Total liquidity is reported at $53.3 billion, comprising cash, liquid financial assets, and undrawn credit facilities. The Company maintains access to $1.2 billion under the Federal Home Loan Bank (FHLB) program and $500 million under a revolving credit facility.
Risks and Contingencies:
- Market Risk: Significant exposure to interest rate fluctuations, foreign currency exchange rates, and equity market volatility affecting the fair value of assets and liabilities (particularly embedded derivatives and MRBs).
- Discontinued Operations: The P&C segment has been divested; future results will not include this line of business.
- Regulatory/Tax: Ongoing evaluation of the impact of the Bermuda Corporate Income Tax regime and global minimum tax (Pillar Two) requirements.
- Legal: Routine litigation regarding sales practices and contract breaches is ongoing, though management does not anticipate a material adverse effect.
Key Facts for Investor Verification
- PRT Market Sensitivity: Verify the sustainability of the Pension Risk Transfer market, as a significant portion of net premiums and reserve changes are tied to this volatile segment.
- Investment Portfolio Rotation: Confirm the yield and credit quality of the "higher yielding investment strategies" cited as the driver for increased net investment income.
- Equity Valuation Impact: Assess the magnitude of unrealized losses on equity securities and their potential impact on future capital adequacy and OCI.
- Bermuda Tax Exposure: Review the specific impacts of the Bermuda Corporate Income Tax regime on future effective tax rates and deferred tax assets.
- DOE Reconciliation: Scrutinize the reconciliation between GAAP Net Loss and Non-GAAP Distributable Operating Earnings to understand the magnitude of mark-to-market adjustments excluded from the core metric.