Brighthouse Financial, Inc.

Brighthouse reported Q2 2025 adjusted earnings of $198 million, or $3.43 per share, versus $346 million in Q2 2024 and $245 million in Q1 2025 adjusted earnings less notables. Total annuity sales were $2.6 billion, up 16% sequentially and 8% year over year; Shield sales were $1.9 billion; fixed annuity sales were $500 million; and life insurance sales were $33 million, with year-to-date life sales of $69 million, up about 21% year over year. The estimated combined RBC ratio was 405%-425% at June 30, TAC was approximately $5.6 billion versus about $5.5 billion at March 31, and holding company liquid assets were over $900 million. For Q3 and beyond, management said the revised hedging transition should be completed by end-September, but it did not provide earnings guidance or an RBC outlook; it said long-term free cash flow projections are not likely to be provided in 2025.

Eric Steigerwalt framed the quarter as continued execution on capital-focused initiatives while maintaining franchise strength. He emphasized strong sales, additional deposits from BlackRock’s LifePath Paycheck, expense discipline, and a strong capital/liquidity position. His tone was confident and steady, with repeated focus on protecting the franchise and growing new business without weakening statutory balance sheet protection under adverse markets.

Ed Spehar highlighted that the company’s estimated combined RBC ratio remained within target at 405%-425%, with TAC rising to about $5.6 billion from $5.5 billion at March 31. He attributed the RBC decline mainly to seasonality, fixed-business capital charges and adverse non-VA results, partly from mortality, while noting the quarter’s statutory picture is distorted by $1.2 billion of after-tax unrealized hedging gains. On earnings, he said adjusted earnings of $198 million were about $60 million below run rate because alternative investment income was only $32 million at a 1.5% yield and underwriting margin was lower due to higher average claims severity; he also said corporate expenses were $202 million pretax, down from $239 million in Q1 and slightly above $200 million a year ago.

Analysts pressed on whether the annual actuarial review could create a statutory charge, but management declined to speculate and said the review work is still underway. Several questions focused on the hedging redesign: management said VA and Shield will be managed separately by end-September, with revisions already underway, and described the move as simplifying the structure, increasing transparency, and likely reducing volatility over time. Questions on buybacks, preferred dividends and M&A were met with guarded but generally supportive responses: buybacks paused when the 10b5-1 plan expired in May, there is no intent to stop preferred dividends, and management would not comment on transaction rumors. Analysts also asked about capital extraction, unassigned surplus and BRCD, with management saying unassigned funds around negative $2 billion is a technical issue in the VA framework and that BRCD is not viewed as a source of excess capital.