Corebridge Q3 Operating EPS Rises 27%; Equitable Deal on Track

Corebridge Financial reported higher third-quarter operating earnings per share as stronger fee income, favorable mortality and growth in Institutional Markets offset pressure from actuarial assumption updates and lower underlying earnings excluding variable investment income and notable items. The insurer also said its planned merger with Equitable Holdings remains on track to close by the end of 2026.

Adjusted pre-tax operating income rose to $677 million from $654 million a year earlier. Adjusted after-tax operating income increased to $545 million from $520 million, while operating EPS climbed 27% to $1.22, aided by a lower share count following repurchases. Adjusted return on average equity increased to 12.1% from 10.3%.

Excluding variable investment income and notable items, however, adjusted pre-tax operating income declined 9%, while operating EPS rose 12%. The quarter included a $99 million adverse impact from the annual actuarial assumption update, equivalent to $0.17 per share. Alternative investment returns exceeded long-term expectations by $29 million, adding $0.05 per share.

GAAP net income attributable to Corebridge common shareholders was $1.44 billion, or $3.22 per diluted share, compared with $144 million, or $0.27 per share, a year earlier. The difference between GAAP and adjusted results reflected items including Fortitude Re-related adjustments, changes in the fair value of market risk benefits and net realized gains.

Corebridge’s total sources of income increased 7% to $1.71 billion. Excluding variable investment income and notable items, sources of income rose 2%, supported by a 7% increase in fee income and a 2% increase in underwriting margin. Base spread income was roughly unchanged on that basis, as business growth was offset by the continuing earn-in of the Federal Reserve’s 2025 rate cuts.

Retirement and institutional businesses

Individual Retirement adjusted pre-tax operating income increased 3% to $466 million, although it declined 4% excluding variable investment income and notable items. Fee income rose 18% as the business expanded, while base spread income decreased marginally due primarily to the impact of late-2025 rate cuts. Higher deferred acquisition cost amortization, reflecting business growth, higher interest rates and the annual assumption update, also weighed on results.

Individual Retirement premiums and deposits fell 19% to $4.47 billion. Fixed-index annuity deposits declined 42% to $1.63 billion, while registered index-linked annuity deposits rose 26% to $822 million and fixed-annuity deposits slipped 2% to $2.01 billion. Total sales of $4.5 billion were 17% higher sequentially and represented the segment’s strongest quarter of 2026. Net inflows remained positive at $1.05 billion, though they were down 48% year over year. The surrender rate declined to 9.6% from 10.9% in the second quarter.

Group Retirement adjusted pre-tax operating income decreased 11% to $164 million, or 12% excluding variable investment income and notable items, as the business continued shifting from spread-based products toward fee-generating wealth management. Fee income excluding notable items rose 5% and accounted for 64% of segment sources of income, up from 59% a year earlier. Advisory and brokerage assets increased 11% to $20 billion, with more than half of sales coming from wealth management.

Institutional Markets delivered the strongest segment earnings growth. Adjusted pre-tax operating income rose 48% to $198 million as sources of income increased 36%. Base spread income grew 7%, while total spread income rose 42% with help from higher variable investment income. Premiums and deposits fell 59% to $1.70 billion, largely because pension risk transfer and assumed reinsurance activity declined 90% to $156 million. Guaranteed investment contract issuance totaled $1.50 billion, which Corebridge said remained above its historical average despite late-quarter market volatility. Segment reserves rose 10% to $57 billion.

Life Insurance adjusted pre-tax operating income declined 32% to $17 million because of a larger annual assumption update. Excluding variable investment income and notable items, earnings were unchanged. Underwriting margin increased 1%, reflecting more favorable mortality and higher variable investment income. New-business sales rose 18% to $90 million, including a 24% increase in traditional life sales.

Cash generation, capital and investments

Corebridge generated $475 million of holding-company cash for a 15th consecutive quarter above $400 million. It returned $295 million to shareholders during the quarter and reported a 74% year-to-date payout ratio, excluding proceeds from its variable-annuity reinsurance transaction. The company expects both insurance-company dividends and shareholder capital returns to exceed $2.3 billion in 2026.

Holding-company liquidity was $1.29 billion at quarter-end, excluding $3 billion available through revolving credit facilities. Corebridge has also pre-funded $750 million of the $1.3 billion of debt maturing in April 2027.

The insurer reported a $234.5 billion investment portfolio on a GAAP carrying-value basis, with 97% in fixed-income or short-term investments and 96% of fixed maturities rated investment grade. New-money yields of 6.1% exceeded yields on assets rolling off the portfolio. On a statutory basis, total investments were $286.2 billion at September 30, including $51.8 billion of private debt excluding Fortitude Re ModCo assets. Corebridge said it was opportunistically reducing below-investment-grade exposure with minimal effect on yields.

Merger and outlook

Corebridge said it has identified more than $100 million of run-rate expense savings expected to be recognized in the first half of 2027, toward a $150 million full-year target associated with the Equitable transaction. Shareholders approved the merger on July 30, all federal approvals have been received, and the companies are working through remaining state and international approvals. Corebridge continues to expect the transaction to close by year-end 2026.

For the fourth quarter, management expects alternative investment returns of 1% to 2%, below its long-term assumption of 8% to 9%. Full-year operating expenses are expected to be 4% to 5%, or about $60 million, above 2025. Corebridge remains committed to a 60% to 65% payout-ratio target.

The company expects Individual Retirement base spread income of about $2.55 billion for 2026 under its stated rate, flow and investment assumptions, with base spreads expected to level off by year-end. It also expects positive net flows as additional fixed-index annuity business exits surrender-charge periods. Life Insurance adjusted pre-tax operating income is expected at the upper end of the company’s $110 million to $120 million range for the second through fourth quarters.

Risks highlighted by Corebridge include changes in interest rates and credit spreads, equity-market volatility, economic deterioration, insurance-claim uncertainty, counterparty and reinsurance exposure, investment illiquidity, credit-rating changes and operational or cybersecurity disruptions. Completion of the Equitable transaction also remains subject to outstanding approvals and other closing conditions, while the timing and extent of projected integration savings are not guaranteed.