Brighthouse Financial might focus more on using life insurance company cash to fuel annuity sales growth for the rest of the year and less on buying back shares of common stock from shareholders.
Company executives talked about what they see as new opportunities to use cash during a conference call they held to go over third-quarter earnings with securities analysts.
Brighthouse used twice as much capital to fuel annuity sales growth in the third quarter as expected, and strong sales have continued into this quarter, according to Ed Spehar, the company's chief financial officer.
"We are excited to have the opportunity to deploy capital in new business," Spehar said.
What It Means
People like your clients are adding many fixed annuities to their retirement planning arrangements.
The Earnings
The third quarter ended Sept. 30.
Brighthouse is reporting a $702 million net loss for the quarter on $1.5 billion in revenue, compared with $361 million in net income on $2.5 billion in revenue for the third quarter of 2021.
Adjusted earnings, which excluded a number of unusual items and items that don't affect how much cash the company has, fell to $97 million, from $450 million.
The list of notable items includes a $439 million drop in the value of the derivatives the company uses to run its life and annuity operations. Most of the decrease was related to derivatives used in hedging for universal life policies with secondary guarantees.
The derivatives value change item has no effect on the company's current level of cash.
The list of notable items also includes $336 million in expenses related to fees and costs for the guaranteed minimum income benefits associated with older Brighthouse annuities.
Product Sales
Life insurance sales fell to $19 million, from $27 million in the year-earlier quarter.
Variable annuity sales fell to $1.7 billion, from $2.1 billion.
Sales of the variable annuity contracts Brighthouse is emphasized — the Shield Level registered index-linked annuity contracts — fell to $1.4 billion, from $1.6 billion.
