F&G flounders with investors despite strong annuity sales
F&G Annuities and Life is a Top 15 annuity seller with a strong lineup of products. But its financial performance continues to turn off investors.
F&G shares hit a 52-week low Friday as executives met with Wall Street analysts to discuss fourth-quarter and full-year results. Shares fell 23% in six months and about 40% in one year.
Analysts blame a combination of factors for F&G’s low valuation, including the company’s exposure to private credit and alternative investments, as well as its poor financial performance. The most-recent quarter added another set of poor numbers.
F&G reported fourth-quarter adjusted earnings of $0.91 per share, falling 42% below the analyst consensus estimate of $1.57.
Net earnings plummeted to $124 million, down from $323 million in the same quarter the previous year. The earnings shortfall was primarily attributed to alternative investment returns (about 7%) falling below management’s long-term expectation of 10%.
Still, CEO Chris Blunt said his company is undervalued by the market.
“We are trading at 62 cents of book value,” he said. “Historically, that is associated with companies with massively toxic liabilities, not a pristine fixed book of surrender charge protected FIAs and non-surrenderable liabilities.”
F&G gave analysts more disclosure this quarter around credit and specifically what is in its private credit portfolio, Blunt said, including refreshed stress test numbers.
“The stock is trading as though there are billions and billions of credit losses coming,” he added. “It is pretty inexplicable to me, to be quite honest.”
F&G finished the third quarter, according to the most recent figures available from LIMRA, as the No. 15 annuity seller with nearly $8.4 billion in sales for the year.
Indexed annuities led the way with $6.7 billion in full year sales, said Conor Ernan Murphy, chief financial officer, including $1.9 billion in Q4, 12% over the fourth quarter 2024.
“This is a strong result in a competitive environment and coming off a record 2024 for fixed indexed annuity sales for both F&G and the industry,” Murphy said.
In Other News
MYGAs out. Unless they’re not. F&G is likely to continue to emphasize FIA sales going forward, Murphy said in his prepared remarks. During a later question about multi-year guaranteed annuities, Murphy downplayed the company’s interest in the product.
MYGAs have been very popular in recent years, with sales reaching record highs, driven by high interest rates, market volatility, and a desire for safe, principal-protected investments.
“We are seeing better relative returns elsewhere, meaning across the other core products,” Murphy said. “We will continue to write MYGA, but be a little more selective about it. So, we are entirely prepared to write less here and deploy that capital in other places.”
That brought Blunt into the conversation. The market will determine where F&G writes business, he said.
“We reinsure the vast majority of our MYGA out,” Blunt said. “So, if the returns and the demand from the reinsurers are there, we will certainly write it. If there are more attractive places to put capital, we will do that.”
Ancient deal. F&G is in the process of closing a transaction to sell F&G Life Re Limited to Ancient Financial Holdings.
The deal involves selling the legal entity and the remaining runoff in-force block. F&G is on track to close the transaction during the first quarter of 2026, Murphy said.
F&G expects to receive approximately $300 million in net proceeds from this sale. The transaction is intended to provide “counterparty diversification for MYGA flow reinsurance in the future.”
Quarterly Snapshot
- Record assets under management before flow reinsurance of $73.1 billion at year end, an increase of 12% over year-end 2024.
- Estimated risk-based capital ratio of approximately 430% as of Dec. 31, 2025.
- Gross sales of $14.6 billion for the full year 2025, including $3.4 billion in the fourth quarter.
- The investment portfolio included 97% of fixed maturities being investment grade.
Management Perspective
“We have a lot of people who show up at our doorstep who want to be our reinsurance partners. And honestly, individual appetites at these companies ebb and flow. So you have to be prepared with a nice suite of partners. … In fact, we probably have more partners than we that we can handle at the moment, or could have more partners than we could handle.”
CFO Conor Ernan Murphy
By The Numbers
- Adjusted Net Earnings: $123 million ($143 million in Q4 2024)
- Net Sales: $2.3 billion ($2.44 billion in Q4 2024)
- Earnings Per Share: $0.91 per share ($1.12 in Q4 2024)
- Share Repurchases: None
- Dividend Declared: $38 million in Q4 2025
- Stock Price Movement: Shares down 7% to $25.74 at midday Friday
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