Brighthouse Posts Variable Annuity Strength Analysis

By Allison Bell

News February 27, 2019 at 06:58 PM

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Brighthouse Financial Inc. has developed a new presentation, to support the argument that its variable annuity business will be a powerful source of cash from now through 2021.

The Charlotte, North Carolina-based company is making that case to show investors, and securities analysts, that the company really can return $1.5 billion in capital to shareholders over the next two years.

MetLife Inc. formed Brighthouse by putting its U.S. individual life and annuity operations into a unit named Brighthouse, and transferring control over Brighthouse to the MetLife shareholders.

Brighthouse managers say in the new presentation that the variable annuity unit should produce large amounts of cash, even though the company is trying to keep the unit capitalized well enough to perform well in the kinds of severe financial crises that might occur about once every 50 years.

Managers include a chart showing how they think the in-force lifetime present value of variable annuity cash flows should perform under five different sets of assumptions.

The value estimates shown in the chart range from $1.5 billion up to $13.4 billion.