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Operator: Hello, everyone. Thank you for joining us, and welcome to Corebridge Financial Inc. First Quarter 2026 Earnings Call. [Operator Instructions] I will now hand the conference over to Isil Muderrisoglu, Head of Investor and Rating Agency Relations. Please go ahead.

Isil Muderrisoglu: Good morning, everyone, and welcome to Corebridge Financial’s earnings update for the first quarter of 2026. Joining me on the call are Mark Costantini, President and Chief Executive Officer; Chris Filiaggi, our Interim Chief Financial Officer and Chief Accounting Officer; and Lisa Longino, our Chief Investment Officer. We will begin with prepared remarks by Mark and Chris, and then we will take your questions. Today’s comments may contain forward-looking statements, which are subject to risks and uncertainties. These statements are not guarantees of future performance or events and are based upon management’s current expectations and assumptions. Corebridge’s filings with the SEC provide details on important factors that may cause actual results or events to differ materially from those expressed or implied by such forward-looking statements.

Except as required by the applicable securities laws, Corebridge is under no obligation to update any forward-looking statements if circumstances or management’s estimates or opinions should change and you are cautioned to not place undue reliance on any forward-looking statements. Additionally, today’s remarks may refer to non-GAAP financial measures. The reconciliation of such measures to the most comparable GAAP figures is included in our earnings release, financial supplement and earnings presentation, all of which are available on our website at investors.corbridgefinancial.com. With that, I would now like to turn the call over to Mark and Chris for their prepared remarks. Marc?

Marc Costantini: Good morning. and thanks for joining us. I’d like to formally welcome our CFO, Chris Filiaggi, to the call as well as our Chief Investment Officer, Lisa Longino, I’ll begin this morning with a recap on the strategic rationale of our transformative merger with Equitable and an update on progress we’ve made to date followed by some observations on the current market environment and our corporate business model performed in the first quarter. I’ll also spontalize some of the actions we’re taking to win with customers. Turning to Slide 3, we are bringing together 3 outstanding franchises to create a diversified financial services company with leading positions in retirement, life, wealth and asset management. Together, we will have more than 12 million customers and $1.5 trillion in assets under management and administration.

Our combined distribution capabilities will be formidable. We will have a large multichannel distribution ecosystem to reach the broadest possible customer base. Our enhanced scale will drive significant synergies, $500 million in expense synergies plus meaningful upside opportunities from additional revenue tax and capital synergies. Our greater scale should reduce our cost of capital to help us provide better customer solutions at lower cost, allow for greater investment and strengthen our ability to attract top talent. The transaction will allow us to further diversify our source of income, which helps provide resilient earnings across market cycles. Our growth prospects will be considerable across the combined company’s businesses with our integrated model allowing us to capture the full value chain.

The balance sheet of the combined company will be robust. By 2027, we expect earnings to exceed $5 billion per year, cash generation will be strong and consistent, topping $4 billion per year. The merger will be immediately accretive to both earnings per share and cash generation. both of which should increase to 10-plus percent by year-end 2028. Turning to Slide 4. The upside potential for all our businesses will be strengthened with the merger. In individual retirement and life, we will have meaningful revenue synergies. For example, our fixed and fixed index annuities will complement Equitable’s annuity offerings and their variable universal life product will complement our life offerings. Together, we will be a leader in the [indiscernible] group retirement space with a large workplace distribution force.

We will have more capabilities and balance sheet capacity to support our growth in institutional markets. In the combined company’s asset management and wealth management businesses, Alliance Bernstein will have nearly $1 trillion in AUM and we’ll have over 5,000 advisers to drive growth. We are making good progress on steps required to close this transformative transaction. We already have completed a vast majority of our regulatory filings, our Form S-4, including the shareholder proxy statement will be filed with the U.S. Securities and Exchange Commission shortly. We believe the shareholders of both companies will approve the transaction, given its compelling rationale. The executive team of the combined company has been determined and will be communicated soon.

I’m confident we have the right leadership to execute on all our strategic objectives. Both companies have established integration management offices that are hard at work planning a seamless integration that captures the full value of the synergies. Finally, an important update on the timing of share repurchases. As we indicated in the 8-K filed earlier this month, we are exploring undertaking share repurchases prior to the closing of the merger including during the period from filing the preliminary proxy with the SEC until we mail the final proxy to shareholders. We also continue to expect another opportunity when we can repurchase shares after the shareholder board December, subject to normal blackout periods. Any remaining capital we plan to deploy will be facilitated post close likely through an accelerated share repurchase.

Turning to Slide 5. Corebridge demonstrated strong performance driven by favorable industry demographics and sustained customer demand in the first quarter. Despite facing heightened market volatility and competition, our disciplined approach continues to deliver solid results. Our wide array of product and service offerings enable us to meet a wide variety of customer needs, enhance the stability of our financial results and allow us to allocate capital where returns are the highest. Our powerful balance sheet continues to give us financial flexibility and our disciplined execution shows up in everything we do. Our overall performance in the quarter was strong. Excluding variable investment income and notable items, year-over-year operating earnings per share were up 13% and adjusted return on equity was up 120 basis points.

The foundation of our success is winning with customers and I include our distribution partners and plan sponsors in that category. We were proud to be ranked #1 by J.D. Power for partner satisfaction and annuity distribution. This validates our strategic focus on the adviser experience and our goal of being the easiest firm in the industry to do business with. We also continue to see strong momentum in our Group Retirement NPS and with planned sponsor satisfaction rising year-over-year. I’ll have more to say about how we’re investing in customer experience in a minute. In Individual Retirement, we delivered strong sales of $4.3 billion, while maintaining pricing discipline and consistently positive net flows. The market outlook remains positive — the Peak 65 surge is continuing with another 4 million Americans hitting that retirement milestone this year.

In Group Retirement, we continue to see the transition from a spratifee-based business. Fee-based earnings are approximately 60% of the total with advisory and brokerage assets rising to all-time highs, growing 14% year-over-year, benefiting from record levels and net inflows. In life, excluding VII and seasonally higher mortality, we continue to deliver earnings within our guided range, reinforcing a stable earnings for the company. And in institutional markets — the underlying business continues to grow with an 18% increase in reserves. We issued $1 billion of guaranteed investment contracts in January, including our first-ever Canadian dollar-denominated GIC. The pension risk transfer pipeline remains healthy with greater activity expected in the second half of the year.

I believe the key to our success will be a relentless focus on putting the customer at the center of everything we do. Our road map is simple: to deliver a differentiated customer value proposition, be the easiest company to do business with and maintain a world-class distribution. That is how we generate more value for customers and investors alike. As I said on my first earnings call 3 months ago, we’re going to make the investments needed to improve the customer experience. Those efforts are well underway at Corebridge in 2026. A few highlights. We’ve launched a customer council steered by the executive leadership group and comprised of cross-functional senior leaders from across the company. They are showcasing key initiatives, sharing best practices, identifying quick wins and above all, ensuring we maintain a customer-first mindset.

Across our retail operations, we’re modernizing how new business is onboarded by further enhancing digital submissions, strengthening upfront suitability checks and improving real-time application status, all of which has removed uncertainty, delay and friction from the process. We’ve launched a new wealth management digital experience last month that allows clients to seamlessly navigate their product and service relationship with us and stay connected with their financial adviser. We’re moving permanent life products onto our digital submission platform, and we’re launching a new payroll platform that makes it easier for group retirement plan sponsors to integrate their payroll data with us. In closing, we’re excited about the future of our business.

Externally, powerful demographic tailwinds are creating a large market opportunity. Internally, our customer-first mindset and emphasis on operating at speed will enable us to capture a significant share of that opportunity. The result will be a company that delivers significant growth in earnings per share cash generation and shareholder value. This is true of Corebridge today and will continue into the future as a combined company. With that, I’m pleased to turn the call over to Chris.

Christopher Filiaggi: Thank you, Marc. I’m excited to join today’s call and will provide further color on our performance for the first quarter. Starting with Slide 6. Our results this quarter underscore the strength of the Corebridge model, consistent growth and active capital deployment balanced by expense control and portfolio optimization. Performance was largely in line with our guidance from the fourth quarter, highlighting our diverse stable earnings patterns and agility and capital management. We reported adjusted pretax operating income of $629 million and earnings per share of $1.05. The first quarter results were impacted by underperformance of our variable investment income. Excluding the impact of VII and notables, EPS increased by 13% year-over-year, demonstrating the underlying strength of our core businesses.

VII returns were impacted by several components including positive alternative investment returns, offset by unrealized mark-to-market losses on investments accounted for at fair value with changes in fair value reported in adjusted pretax operating income. Adjusting for long-term alternative investment returns and notable items, we delivered a run rate operating EPS of $1.17, representing a 9% increase year-over-year. Finally, adjusted ROE was 10.6% or approximately 12% on a run rate basis. Excluding VII and notables, this reflects a 120 basis point increase year-over-year, underscoring our commitment to consistent profitable growth. Turning to Slide 7. Our businesses continue to evolve, delivering highly diversified sources of earnings and strong, stable cash generation regardless of the market environment.

Our core sources of income, excluding alternatives and notable items, increased 1% year-over-year with some variation in the underlying components. Fee income increased by 9%, driven by growth in assets under management and advisory alongside favorable market tailwinds. Spread income increased by 1%, which is in line with our guidance around the earning of the majority of the 2025 fed rate cuts. To put that in perspective, had those rate cuts not occurred base spread income would have been approximately $20 million to $25 million higher. Underwriting margin decreased 2% year-over-year due to exceptionally favorable mortality in the first quarter of 2025. Lastly, general operating expenses were in line with our expectations. This reflects ongoing investments we are making in our platform, as Mark highlighted earlier, as well as typical first quarter seasonality.

Looking ahead, we remain fully committed to disciplined expense management and improving our operating leverage over time. Turning to Slide 8 and looking at our capital position. Our balance sheet continues to be healthy and strong. We ended the quarter with over $1.7 billion in holding company liquidity, supported by our U.S. insurance companies distributing $925 million of dividends in the quarter and our level of liquidity exceeds the holding company’s needs for the next 12 months. Capital return to shareholders reached $1.4 billion in the quarter. This included the completion of our planned capital returns related to the VA reinsurance transaction totaling $1.8 billion. Excluding those VA reinsurance proceeds, we maintained our payout target with a payout ratio of 88%.

Lastly, our insurance companies remain well capitalized with capital ratios exceeding our targets. Next, I’ll review a few highlights from each of our businesses. The details of which can be found in the appendix to our earnings presentation. These results exclude the impact of notable items and variable investment income. Starting with Individual Retirement, we continue to be very positive about this business. The outlook is backed by strong fundamentals and demographic tailwinds that continue to drive demand for our retirement solutions. Premiums and deposits were $4.3 billion, demonstrating growth both sequentially and on a year-over-year basis. Leveraging [indiscernible] first quarter industry projections, we maintained our market share of total annuity sales year-over-year.

This includes our newer Vila product, highlighting our success with key distribution partners. Net flows into the general account remained positive at approximately $0.5 billion, contributing to continued growth in the underlying business. We saw surrender activity in line with our expectations. This reflects fixed and index annuities reaching the end of their tender charge periods. As we look at the full year, we reaffirm our estimate for big spread income to be approximately $2.55 billion. While we continue to see some spread compression, we still expect it to level off by the end of 2026, assuming the current market outlook and 2 additional Fed rate cuts. Lastly, AP TOI increased 1% year-over-year, supported by growth in spread and fee income, highlighting the growth in the underlying business.

Turning to Group Retirement. We are seeing this business evolve as a growing percentage of the American workforce is reaching retirement age. This demographic shift and the steps we are taking because of it are fundamentally changing how we generate value, moving us toward a more diversified and resilient earnings profile. Continued momentum in our advisory and brokerage initiatives resulted in a record level AUMA and net flows of over $300 million in the first quarter. The strong performance is directly related to our efforts focused on the adviser experience and operational ease of doing business, which is delivering early measurable wins as we continue to invest in the platform. APT line decreased 17% year-over-year. This reflects lower spread income, partially offset by growth in fee income.

This transition is intentional. As our clients move into the decumulation phase, we are seeing a natural mix shift away from the spread-based products and towards fee-based income. This aligns with our broader strategy to emphasize capital-light earnings, which now account for nearly 60% of group retirement earnings. Our Life Insurance business delivered another strong quarter, in line with the guidance we provided back in the fourth quarter, reflecting higher seasonal mortality in the range of $15 million to $20 million. This performance is consistent with both our historical experience and seasonal expectations for the start of the year. We generated $850 million in sales this quarter, in line with first quarter expectations. [indiscernible] declined 5% year-over-year.

While mortality trends are favorable and aligned with first quarter expectations, they were below the exceptional mortality experienced in the prior year quarter. Going forward, we remain confident in the steady cash flow and stability this segment provides for the broader portfolio. Institutional markets continues to be a consistent growth engine with both underlying reserves and total earnings trending upward. First quarter sales included over $1 billion in GICs maintaining the consistent momentum we’ve seen highlighting our ongoing commitment to the GIC and FABN market. APT OI increased 15% year-over-year. This growth was underpinned by an 18% expansion in our reserves and a 13% increase in assets under management and administration. Lastly, a comment on pension risk transfer.

Sales in this space are inherently episodic. While we expect volume variability from quarter-to-quarter, our pipeline remains strong. We anticipate an uptick in activity we move into the second half of 2026. Next, I’d like to take a moment to address recent headlines regarding the life insurance industry and its investment portfolios. Corebridge has a long-standing history in private placements recognizing that the vast majority of companies today are privately held rather than public. We are able to utilize this asset class to achieve diversification across our portfolio that isn’t available through public issuance alone. These assets are a natural fit for our liabilities and allow us to not only capture an illiquidity premium, but to do so with the protection of financial covenants, while maintaining a high-quality investment grade profile.

Corebridge maintains control over all aspects of our asset portfolio and risk profile, whether our private debt is originated internally or externally, we maintain rigorous ongoing processes to underwrite, reunderwrite, rate and model our private assets. Out of the $284 billion statutory investment portfolio, $49 billion is in private debt, which is a high-quality diversified book, where 91% of the assets are rated investment grade. To provide further context on our private debt, I’ll address a couple of recent areas of focus, beginning with private credit over what we categorize as middle-market lending. Our allocation here stands at $3.3 billion, representing only 1% of our total portfolio. These investments have attractive risk-adjusted returns and we continue to expect [indiscernible] losses in the middle market lending will be yield adjustments and not credit events.

Further, within the middle market allocation, our debt exposure to the software sector is less than $300 million and all of it is currently performing. Another area of focus in the financial press has been BDCs, like middle market lending, this represents a small part of our portfolio where we hold $1.7 billion of debt issued by BDCs. Our entire exposure consists of debt instruments with no equity holdings in these originations. We Generally, we are a senior lender in these investments and the average asset coverage ratio is approaching 2x, meaning significant asset impairment would be necessary to impact our position in the capital stack. Given our current exposure, robust management processes and the alignment of our liabilities, we remain very comfortable with our positioning.

Our rating migration has been net positive over the last 4 years, and we routinely perform sensitivity testing to ensure we remain well capitalized across all market cycles. In clothing, we remain focused on maintaining a strong balance sheet while generating growing returns to shareholders. Our guidance laid out in the fourth quarter remains largely in place, and we continue to believe 8% to 9% is the appropriate expectation for alternative investment returns over the long term although we do anticipate continued market-driven headwinds based on the current environment. With that, I will turn the call back to Isil.

Isil Muderrisoglu: Thank you, Chris. As a reminder, please limit yourself to one question and one follow-up. Operator, we are now ready to begin the Q&A portion of the call.

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Operator: [Operator Instructions] Your first question comes from the line of Suneet Kamath with Jefferies.

Suneet Kamath: Marc, I wanted to start on distribution. Just curious what you’re hearing from your distribution partners post the merger announcement, is there anything that we should be thinking about in terms of sort of limitations on how much product they want to get from any one counterparty? Or is that not really a concern?

Marc Costantini: Yes. Suneet, thanks for the question. I appreciate it. It’s actually a very good question because as we were going through the process with Equitable when we’re looking at various levels of synergies, we did challenge ourselves in terms of what I guess I would refer to as dis-synergies. And as we announced it, and both firms obviously reached out to all of our distribution partners. I must say to to our delight, we haven’t heard any, I would say, apprehension about the depth and breadth of the the presence will have across these channels. And part of it is because the suite of products, both companies are bringing to the merger are very complementary. So — so if you even pick the largest distributors on each side, the overlap is de minimis, so and the overall volume and — at the end of the day, we feel strongly, and this is a strong premise around this transaction that scale matters and the manufacturing depth and breadth matters.

And it’s easier, we feel for an adviser for he or she to learn a handful of stories and be comfortable dealing with a handful of manufacturers, but when it comes to obviously, the distribution side, but there’s a servicing side as well and how they live the brand. So we feel that’s value add. So the answer to your question is we haven’t heard of any, and we were obviously very pleased by that outcome.

Suneet Kamath: Okay. That’s helpful. And then, I guess, I just want to make sure we’re thinking about this right. When you talk about the $4 billion of cash and the $5 billion of earnings, mean that would sort of imply free cash flow conversion of like 80%, which seems high. So I’m assuming that $4 billion of cash is sort of before holdco expenses, but — just wanted to get a little bit more color on how you’re coming up with those numbers and what they include.

Marc Costantini: Yes. Thank you, Suneet. Yes. So the short answer is, you are correct. And that’s kind of the pro forma that both firms put out there when we obviously communicated this transaction a month or so ago. And so I’ll leave it at that, but that’s right. And that’s pro forma guidance of where we expect the obviously, operating income to be in the flows, obviously, from the operating entities. And and it reflects, obviously, the very attractive synergies we’ll get out of the transaction as well.

Operator: Your next question comes from Alex Scott with Barclays.

Unknown Analyst: First on how you envision health management strategy evolving over time? I know you’re not ready to give revenue synergies, that kind of thing. But Mark, I’ve heard you talk about Wealth Management. I know Equitable, I think, is maybe even gotten a little further down the road with their build-out of wealth management. How do you expect to leverage that? What are you planning to do on that front, even if you could just provide something more qualitative.

Marc Costantini: Yes. Alex, it’s great to take here, Voice. So you’re right. We — and the collective we are very bullish on the wealth management space. I think if I objectively look at what Equitable advisers has done and what they’ve done with that business and the margins and the accretion and the growth of the margins over time and the volume and the AUMs, I think they have wonderful story. And obviously, they have an operating model that’s proven to be successful. And they’ve got 4,500, 4,600 advisers, obviously, in the market. So on our side, I’m going to around about 1,000 advisers we have as part of that business. And we are investing a lot on the infrastructure there to, as you know, cross-sell and upsell, obviously, into those plan participants, and we feel there’s a great opportunity there.

I think we mentioned in the last call that we think that’s upwards of $30 billion of upside there, and we’re as Chris mentioned in his remarks, we are harvesting that opportunity right now. Having said all that, your implicit observation there that their platform is more mature and advanced is true, right? And — so in the category of the devil is in the detail that we are working through now and between now and close that into after close, how we bring both organizations to bear and ensure that 1 plus 1 equals 3, but we are very sensitive to the fact that we’re talking about individuals that are larger have clients that want to grow their own book of business opportunistically, and we are being obviously attentive to that as we bring the 2 organizations together and it’s too early to tell exactly what it looks like.

But we are very, very, obviously, bullish on that business as we look forward.

Unknown Analyst: Got it. Helpful. Second one I had is just on artificial intelligence and investment that you’re going to make there over time. I heard some of the comments in your introductory commentary around the initiatives you’ve already got going on some of the digital interfaces that I think you mentioned. How are you coordinating those efforts with Equitable? I mean how quickly can you start working together on AI adoption just given — I know this transaction probably takes some time to get the closure and so forth, but that a lot of these initiatives are taking shape very quickly in the background.

Marc Costantini: Yes. Thank you. That’s obviously a very important topic, and I’ll give you 3 perspectives. The first one is that each firm is operating independently between now and close, right? So let’s assume closest towards year-end. What we do now is compare notes about the history and what we’ve done and not and develop plans as to how we come together and to integrate the firm, but we operate very much independently until they close. So some of the initiatives that they have ongoing will, I’m sure, continue and some of that we have, which I’ll talk about in a second here, we’ll definitely continue. We are being thoughtful though if there’s overlap in some of these initiatives so that we identify, let’s say, the go-forward platform or approach so that when we plan for integration, we reflect that.

So the second point I’ll make is that, yes, we are accelerating our investment and deployment of AI capabilities. And I want to highlight the point that we want to invest in differentiated outcomes. And what I mean there is that we want to invest heavily in the front end and how do we enable and accelerate the distribution of our products and services to our various channels. And I say this by wanting to arm and facilitate our distribution to provide a better service and guidance and identify faster, the better clients for the products and services that we offer and help people retire with. So that will be — and that is a very key focus of ours. Then it’s enabling a differentiated, I would say, brand and how they live our brand and that comes to the tail end servicing and claims.

And I would say that a simple example of what we’ve deployed over the last few months is digital agents that help our group retirement plans manage their affairs. And as you can imagine, when people call and want to do certain things with their group retirement plan, there’s a lot of complexity for the servicing individuals to get to the right information and get the right outcome, and we’ve got digital agents there now helping surface the right characteristics of every plan and contract that individual has. So that would be one example of how we’ve deployed it. And I think there will be more as time goes on now. The one aspect, and you’ve heard me say this last quarter is that obviously, winning with customers and putting the customer at the forefront of everything we do is very important.

And obviously, the digitization and implementation of thoughtful AI to our platform will be a key part of getting to that outcome.

Operator: Your next question comes from Tom Gallagher with Evercore ISI.

Thomas Gallagher: One question on the deal then a separate question on investment exposure. The — so my question on the deal is the revenue synergies. And Marc, I know you’re you’re still getting through more detailed estimates for what these opportunities represent. But the fact that you’re highlighting it as one of the parts of the strategic rationale for doing the deal, is it fair to assume that this could be material to earnings. I’ll define that as 5% or more as a percent of earnings when we look to 2028 and beyond in terms of the potential opportunity here. Or is it more modest? I just want to get a broader sense because I think this is part of the strategic rationale for doing the deal.

Marc Costantini: Yes. So thanks for the question. I guess there will be ample revenue synergies that we expect on our transaction. I think we obviously guided towards the $100 billion of assets coming from the corporate side of the equation to AllianceBernstein over time. And that will be from the general account and obviously, the separate account assets. There’s a lot of cross revenue synergies about us, corporate selling some of our fixed annuities and fixed index and the resented the accruable advisers channel, which I think — you’ve heard, obviously, that there’s billions there being written that we have access to. There’s a VUL product on their side that was on our design table that we’ll be able to introduce and then there’s the cross-sell and upsell into these group retirement plans that I was just talking to [indiscernible] actually, I think it was Alex asking.

So — but — so those now — it’s too early to put a number on it. I wouldn’t want to say above or below your number and and provide guidance that we haven’t worked through at this point. I think as Robin and I have been mentioning to all of you, we will have an Investor Day in the first half of next year. And at the top of the list or as part of the key aspects of that will be to provide additional guidance on this revenue synergies. So far, obviously, we’ve indexed on the expense synergies given they were easier to identify as we went through the process, and that’s what we’re guiding to. And — but there will be obviously some capital tax and revenue synergies as well tied to the transaction, which is why — we think this one — this transaction is obviously appealing on across many dimensions, including this one.

Thomas Gallagher: Okay. Fair point. I guess my question on the investment side is — I appreciate the disclosure on the BDC debt, the $1.7 billion. We’ve gotten a number of questions on that. And can you — can you just give a little more clarity on — I think there’s this perception out there that since a lot of the BDCs own risky debt, 10% plus yielding pipe loans, single B quality, how certain investors sort of equivocate that to that must be the risk for that exposure. And I think it’s not. But can you talk about how you think about that $1.7 billion of BDC debt, is it all investment grade? I assume it largely is, but how that’s very different than the underlying exposures that the BDCs have themselves?

Marc Costantini: Yes. Tom, I was going to have Lisa, who’s on our call and give you context there. So Lisa, please?

Unknown Executive: Okay. Tom, it’s nice to meet you. Thanks for the question. Look, the way we think about BDCs is, first and foremost, we look at the larger ones. We look at ones that could be public or really the majority of ours are nontraded. So given they’re closed-end funds, they are regulated under the 40 Act, and they have some regulatory covenants in there that help. We view it as the portfolios are highly cash generative diversified pool, first liens with — I mean, the conservative leverage in the low LTVs. And we spend a lot of time looking at that. And our asset managers will go in and regularly look at the portfolio monthly, how is it doing? What does the cash look like? What is picked, what trades are they doing because it is loan investments and there is leverage at the portfolio of companies, we spend a lot of time doing that.

And the risk mitigants really are a significant portfolio diversity in the low LTV and even when we look at stress cases there, it does point to some solid recovery through the unsecured BDC debt because of the structuring. So — and we really — we constantly review the asset coverage ratio. So — and all of this is investment grade, solid investment grade. And as Chris mentioned, we don’t have any equity exposure.

Operator: Your next question comes from Ryan Krueger with KBW.

Ryan Krueger: I think your Individual Retirement sales were roughly flat year-over-year. And I think you said market share was pretty consistent. So that suggests that the industry was also about flat. Just any commentary on why you think sales have slowed at this point. I think the rate environment is still pretty similar to what it was. We obviously have the continued aging of the population. So I just was wondering if you had any perspective on why you think annuity sales have been slowing a bit after the big uptick in the last several years.

Marc Costantini: Yes. Ryan, it’s Marc. So thank you for your question. Yes, I think as you mentioned, our sales are relatively flat year-over-year and quarter-over-quarter across our individual retirement side. I would note that we continue to have very robust activity in the individual retirement side on [indiscernible] side. And as you mentioned, we continue to believe that the demographic trends are very positive and a tailwind, right? We don’t have yet the Q1 market share data, right? So when we guide that we’ve maintained our share from our perspective, it’s based on us accumulating data from our distributors and all that. But our gut tells us that actually our share will have somewhat increased, which which does mean as well, obviously, that the flows across the industry maybe have tempered a bit.

I feel that, that is very temporary. And we feel, obviously, here at Corebridge that we purposely obviously have a depth and breadth of product for different obviously, solutions for the Americans as they accumulate savings for retirement and then draw on retirement income, right? And we believe there’s robust demand and we don’t make a quarter a trend or a conclusion as to what the direction of travel, and we feel that there’s still a lot of growth in that space overall. So — but more to come as all the actual stats come out is what I would say as well.

Ryan Krueger: And then just had a question on the Japan commercial partnership you’re pursuing with Nippon Life. When you think that could become operational? And how many of an opportunity do you think that could actually be for the company over time?

Marc Costantini: Yes. It’s a very good question. And we have a very rich and ongoing discussions with Nippon. As you know, and you — you’ve mentioned here, Nippon is a very important strategic investor in our firm. There will be obviously a or investor in the go-forward firm. And that stems as well from the core manufacturing opportunities we have with them. Like — as you’ve heard me say many times, like brand and distribution matters and you need world-class and they have that in spade and Japan. And — so we are working on co-manufacturing products. Their economy there is reflating. There’s a need for the same products we sell. Having said so, they have a process as well as they evaluate what goes through their distribution channels and what’s right for the end consumer there.

And we’re trying to develop products with them that meet those needs and then they got to be filed. They got to be approved, and they got to be deployed. So I would say that if there’s anything that would be announced at a through the course of 2026, if that happens, it takes at least another 9 to 12 months from then to actually have something in market, right, because of the nature of the regulatory process and the finding process and making sure it gets on the appropriate distribution shelf appropriately. So — so that’s kind of the frame I would give you. But we’re working in collaboration with our — obviously, with Nippon there, and I am cautiously optimistic that there will be something that we will do with Nippon over the course of time, but that’s kind of the time line.

The other thing I’ll say maybe is that — if we look post merger, we have obviously some great asset management, to Alliance Bernstein, and they have a great global presence and that is another part of the equation where we think there’s great revenue synergies eventually as we partner across the world.

Operator: Your next question comes from Wes Carmichael with Wells Fargo.

Wesley Carmichael: First question was on individual retirement. Just on the surrender rate in fixed annuities and FIA that ticked up a little bit sequentially. So just curious if you think that’s going to continue to kind of stay that level from here? Was there a bit of maybe just volatility in the quarter from product exiting surrender charge. And did you see any elevated surrender charge income come through in the quarter?

Marc Costantini: Yes. Thank you, Wes. I appreciate the question. So I think as we’ve guided in prior quarters, there is some business that is approaching the surrender charge period across our fixed annuity and fixed connect annuity typically, those products have a 5- to 6-year kind of surrender charge period, and they’re getting to the end of that point. So over the course of the ’26, ’27 and ’28, we do see spike in that business maturing, and we would expect to see, obviously, more redemptions out of that just natural behavior and maturity of the block. And — we do expect and always strive to have net positive flows, right? And — to the question earlier about the $4.3 billion of flows in a quarter, I’d like to think of our business as a $5 billion of quarter gross flows through various cycles, right?

So you’re looking at a circa $20 billion annuity book on an annual basis. And we feel that the maturity of the block and as business flows out, that will generate a steady stream of net positive kind of flows to our book. And that’s how I would think about it versus looking at any given quarter, but that’s — so we do expect a heightened. But it’s natural maturity of the business, not necessarily any type of unexpected behavior from our policyholders. And — so — and there’s no — to your — I think the other question you had was around surrender charge revenue. There’s no unexpected, I would say, revenue or headwind tied to that in our business right now.

Wesley Carmichael: Got it. That’s helpful. And I guess just second question on the insurance company cash distributions in the quarter. I think that was nearly $650 million when you exclude the VA proceeds. And that’s up nicely sequentially and year-over-year. Do you kind of view that as indicative of a new run rate? Was there anything in the quarter that maybe favorably impacted that?

Marc Costantini: Yes. So I think I’ll offer a comment, and then I’ll hand it to Chris. I think we had heightened flows from the insurance companies in Q1, and I would expect the run rate to be lower. But Chris, maybe you want to give some color there?

Christopher Filiaggi: Yes, sure. Thanks, Wes. Appreciate the question. So first, let me reiterate our guidance on the insurance company dividends. So our expectation was that we would have insurance company distributions at around $2.3 billion in 2026. That does include the dividend to the final $300 million from the Benra Bulls transaction. So that leaves us with about $2 billion of normalized insurance dividends. We did accelerate a portion of our dividends in 1Q. So directionally, you should expect dividends to be lower for the rest of the year, more in the $450 million to $500 million range.

Operator: Next question comes from Cave Montazeri with Deutsche Bank.

Cave Montazeri: Both of my questions are going to be on the Marc’s comment on making [indiscernible] the easiest company to do business with. The first one is on this newly created customer council, the initiatives that they’re working on — are they mainly digital initiatives? Or does that go beyond technology? And maybe can you share some of the quick wins you’ve identified that you want to start working on next?

Marc Costantini: Okay, Cave. I appreciate that question. And we are striving to be the easiest company to do business with. So I appreciate you spiking that out. And yes, so when we launched and rolled out the win with customers, I would say that win with customers was always part of the fabric of corporates and AIG Life and Retirement business. And I think the separation, obviously, to precedents and priorities. So it was always there in the DNA. And when we launched it internally and we communicated this broadly to our employees that we had a mentsense of excitement across the organization to to pivot to and pivot back to this kind of focus. So — and it was as part of that, that this idea of forming a customer council is that we have a significant, I would say, members of our senior leadership for participating.

So now what are they up to — so they’re sharing best practices, they’re sharing ideas, they’re implementing, to your point, right? And I would say that you saw in some of my prepared remarks there, that we’ve deployed capability and a lot of it is through digitization to answer your question, right? A lot of it is how do we make the lives of our distributors, of our plan sponsors and our customers easier when they do business with Corebridge, how do we make it more predictable. So — and I think as you saw there, we are deploying some digital assets and new infrastructure to help employers through payroll deductions and distributions on the Group Retirement side. We are facilitating more straight through processing on the life insurance side, and we are digitizing some of the interactions on the annuity side.

And that I’m getting over a cold here, but — so that’s kind of the things that we’ve been doing, I guess, I would say, Cave.

Cave Montazeri: Great. And then my follow-up, somewhat linked to this is, and obviously, merging with Equitable is going to help you be an easier company to do business with, you have more products, et cetera, to offer. But there could also be a bit of a nightmare in terms of integrating the different platforms, IT systems, et cetera. So do you guys plan on kind of trying to run all of the back office for like a better terms separately for a while and just to make sure nothing breaks. Or is there a plan to really just integrate everything under one umbrella as quickly as possible in order to just really optimize the data that you guys have and that they have and really just offer kind of the best experience for the customers going forward.

Marc Costantini: Yes, Cave, that’s another very good question. And I would say when we worked very closely with our Equable colleagues as part of the identification of the $500 million of run rate synergies, kind of platform kind of what we did with the platform, how they came together and how we pick the best platform on a go-forward basis to best serve the customers was a key part of the — some of the outcomes here. And there’s a lot of dollar investments tied to that, that were planned for. And the teams right now are working through the details of that. And I think as with anything that comes with this type of territory, every business and every function and every infrastructure will be a bit different. And the idea will be to enhance the customer experience, but not be disruptive to the customers as well, right?

So I think it’s kind of the — it will depend — depending on the business and the product line, how we approach it. But the spirit of what you’re saying is definitely what we’re aiming to achieve over time. But it won’t happen day 1, as you can imagine, given the nature and intricacy of the model we need to operate under so.

Operator: The next question comes from Joel Hurwitz with Dowling & Partners.

Joel Hurwitz: I wanted to touch on variable investment income. Can you just provide some color on on what flows through other variable investment income that was negative in the quarter? And then are you seeing any rebound thus far in Q2? And maybe talk about what you’re expecting for VII in the second quarter.

Marc Costantini: Yes, I’ll have Lisa answer that one.

Unknown Executive: Joe, nice to meet you. Thanks for the question. So as Chris went through on VII, we — in the quarter, we had a bit lower in [indiscernible] in the non– that was really just nonrecurring marks on otherwise fixed income assets that are held in vehicles. And so it gets marked through operating income versus OCI. That has reversed. So we’re not expecting to see that again. In addition, as we look forward into second quarter, in general, we’re seeing VII slightly better. We still think second quarter could be below expectations, just given the volatility in the market.

Joel Hurwitz: Got it. That’s helpful. And then just on buybacks, you have a nice liquidity cushion at the holdco versus your needs. I guess just any commentary on your willingness to significantly draw that down in this open window and particularly if AIG comes to the market with the rest of its stake?

Marc Costantini: Yes, Joe, it’s Marc. Thanks for the question. So as you noted, obviously, we did $1.25 billion of buybacks in Q1 before, obviously, we went quiet because of the the proceedings that took place with Equitable. As I mentioned in my remarks and as we — as part of our 8-K filing not too long ago, as we file our proxy, and we expect to later today, we do plan obviously in concert with Equable to go back in the market to do buybacks between the, obviously, the filing and the mailing of the proxies. And we won’t guide us to the amount we’ll do, obviously, in the market. And — and we can certainly not speak to what AIG will be — I know their CEO, I guess, and as part of their year-end call said that the they would like to be out of their holdings of Corebridge by year-end, but we have no insight otherwise, to provide here and know would it be our place to do so.

So — but we — as we said, we will be active in the market between the the filing and the mailing. And obviously, we intend to be in the market as well after the vote later this summer. So — and we do have liquidity to deploy, as you say. But we’ve guided obviously to how much we would do over the course of the year, and we’re going to hold to that guidance right now.

Operator: Your next question comes from Jack Matten with BMO Capital Markets.

Francis Matten: Maybe one on group retirement. I know it’s been in transition. I guess, can you help us frame the time line for when Corebridge expects earnings to stabilize in that business? Are we getting close to that point now? Or do you think it’s more likely maybe after the merge closes and you see some synergies from that combination?

Marc Costantini: Jack, thanks for the question. Our expectation is that there’s another 12 to 24 months for this transition to take place. So we we feel that we are trying to pivot this business and are providing this business from fee spread spread business to fee business. And we’re seeing green shoots there. As Chris mentioned in his prepared remarks, obviously, we had some very good flows into that business. We’re getting to the $20 billion point in terms of fee-based businesses. But there’s still room to make headway there. And obviously, the spread level income on that business is heavier than the fee-based, which is why it creates that, obviously, headwind that will take 12 to 24 months from here to work true. To your comment and question, as we try to make that dividend cross-sell and upsell to the participants.

Obviously, the merger presents opportunities here in terms of the discussion we had earlier about the Equitable advisers and teaming up with that platform and those individuals to further penetrate our plans. Now — do I expect that to happen day 1 after the close, No, right? It takes some time for the teams to get together as we mentioned earlier, before we close, we operate independently, right? So we can plan, but we can execute. So — so I suspect that execution will take place in the first half of 2027, and then we see the green shoots appear afterwards across the various platforms, including this one. So that’s kind of our perspective on that.

Francis Matten: That’s helpful. And then maybe a follow-up on the annuities marketplace. I guess, is your view that the competition is still intensifying in any of the product categories where you currently focus? Or do you think the market is settling in to do a new equilibrium at this point? And then maybe gives you kind of cogen some spreads stabilizing by the end of this year. But I think you said earlier that higher surrenders could potentially persist into next year or 2028. Just looking for any color there.

Marc Costantini: Yes. So sure. So 2 perspectives there in your question. The first one was the — how intense the competition is. And I always find that a very interesting question because I never felt any quarter there was no competition. So the intensity of the competition ebbs and flows depending on who wants to pick their spots where. And you are correct that there’s — at the low end of the curve, there is a lot more capital being deployed there. And as you in our sales, we’re being judicious on how we allocate that capital, and we typically redeploy it to our institutional markets business, and you saw us do obviously $1 billion plus of gigs in Q1. And that’s how we kind of judge the allocation of capital, but that’s what I would say about the market competitiveness of the business.

In terms of spreads, we continue to believe that our spreads on the IR business will level off towards year-end. And then given where we are in the interest rate cycle and where spreads are that we will basically expand from that point on. So we still expect, let’s say, this year and or thereabouts to be where they would level off and then start growing and we would still guide to what we have set out there last quarter about that business as well.

Operator: Your next question comes from Wilma Burdis with Raymond James.

Wilma Jackson Burdis: Given the combined scale of Corporate and Equitable and the investments you plan to make in wealth. Is it possible to accelerate the goal of making the wealth business self-clearing? If I’m recalling correctly, this would add quite a bit of margin and I’m estimating over $100 million of annual wealth earnings. So any color you can provide there on the plans?

Marc Costantini: Yes, Wilma, thanks for the question. I think you’re primarily referring to Equitable’s Wealth Advisors business that is not self-clearing yet, and obviously, scale gets you there. And I’m not going to offer a view yet. I’m not — we’re not informed enough to really have any view on that. I understand the economics we’re referring to and the potential benefits, but we’re not ready to guide to that. And I will wait again to what we do tied to any Investor Day or [indiscernible] about our view on that business and how we think we will continue to grow it. And as I said — as I mentioned earlier, we are very, very bullish on this business and it’s one that’s core to our future.

Wilma Jackson Burdis: Makes sense. And — we looked at the commentary that you all have given on capital and tax benefits and calculated that you sort of back calculated it implied about $500 million to $1.5 billion of capital freed up, just the synergies between the 2 companies. Just wanted to check if that estimate is in the ballpark or if there’s anything that we are missing or any other directions on [indiscernible].

Marc Costantini: Yes. thank you for that follow-up. I would say that we have not guided to specific capital and tax benefits. I think we’ve guided to the fact that we think we’ll have 10-plus percent EPS accretion run rate after 2028, which will be a combination of factors, which will include those you’re mentioning. But more to come on all of that, including the revenue synergies, and I would point back to the discussion with Tom earlier about Investor Day and Robin and myself and others coming to all of you with more specifics across all of that. But we do firmly believe the transaction will be double-digit accretion over the next 24 months, for sure.

Operator: Your next question comes from Mike Ward with UBS.

Michael Ward: So I was just wondering about kind of the Corebridge brand in the merger scenario. It’s certainly younger than the equitable brand. Just wondering based on what you guys saw coming out of AIG, thinking through any kind of shock lapse. Is that kind of done with? Or could there be a temporary uptick post-merger.

Marc Costantini: Yes, Mike, thank you for the question. So yes, so we have decided that we are going to go forward with the [indiscernible] brand post merger. Obviously, the [indiscernible] has an incredible history in legacy, a 167-year-old brand. We are obviously going to continue to maintain and invest in the Alliance Bernstein brand, on the asset management side, that brand itself has an incredible cache across all our markets. And which means that we are moving on from the Corebridge brand. And it was not that easy of a even though it’s a 3-, 4-year old brand, a lot of people associated with Corebridge had a lot of pride in the brand, and we’re a purple very proudly. I think — but having said so, it’s a 3-, 4-year old brand versus a 167-year-old one.

So the right decision is to move forward with the [indiscernible] brand, which we will do probably as a combined company. So — and we don’t expect any business ramification out of bringing the brands together, and we actually think it will be value add to represent the collective firm with Equitable and go-forward basis.

Michael Ward: Okay. And so — and then on the — these proposed changes to the RBC factors for CLOs and collateral loans. Just I was wondering if you guys had any early reads on the potential impact for you?

Unknown Executive: Mark, this is Lisa. Nice to meet you. Thank you for the question. Regarding the changes for CLOs, where is going to have incrementally more capital charge for the lower rated tranches and less for the upper — all our indications are it’s going to be a minimal impact to us given the structure of our CLO portfolio. So we’re pretty comfortable with that.

Operator: We have run out of time, and therefore, we have reached the end of the Q&A session. This does conclude today’s call. Thank you for attending. You may now disconnect.

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