Q1 2024 Equitable Holdings Inc Earnings Call

[music].

Dennis: Good morning, my name is Dennis, and I will be your conference operator today. At this time, I would like to welcome everyone to the Equitable Holdings first quarter 2024 earnings call. All lines have been placed on mute to prevent any background noise.

Good morning, My name is Vanessa and I will be your conference operator today.

Vanessa: At this time I would like to welcome everyone to the equitable Holdings first quarter 2024 earnings call.

Vanessa: All lines have been placed on mute to prevent any background noise.

Dennis: After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star, then the number 1 on your telephone keypad. If you would like to withdraw your question, press star 1 again. I would now like to turn the conference over to Eric Bass, Head of Investment Relations. Please go ahead.

Vanessa: After the Speakers' remarks, there will be a question and answer session.

Vanessa: If you would like to ask a question. During this time simply press Star then the number one the Agua telephone keypad. If you would like to withdraw your question Press Star One again I would now like to turn the conference over to Eric Bass head of Investor Relations. Please go ahead.

Erik James Bass: Thank you. Good morning, and welcome to Equitable Holdings' first quarter 2024 earnings call. Materials for today's call can be found on our website at ir.equitableholdings.com. Before we begin, I would like to note that some of the information we present today is forward-looking and subject to certain SEC rules and regulations regarding disclosure. Our results may differ materially from those expressed in or indicated by such forward-looking statements. Please refer to the Safe Harbor language on slide two of our presentation for additional information.

Erik James Bass: Thank you good morning, and welcome to Equitable Holdings first quarter 2024 earnings call materials for today's call can be found on our website at IR Dot equitable holdings Dot com.

Erik James Bass: Before we begin I would like to note that some of the information. We present today is forward looking and subject to certain SEC rules and regulations regarding disclosure of our results may differ materially from those expressed in or indicated by such forward looking statements. Please refer to the safe Harbor language on slide two of our.

Eric Bass: A presentation for additional information.

Erik James Bass: Joining me on today's call are Mark Pearson, President and Chief Executive Officer of Equitable Holdings, Robin Raju, our Chief Financial Officer, Nick Lane, President of Equitable Financial, Jackie Marks, AllianceBernstein's Chief Financial Officer, and Onur Erzan, Head of AllianceBernstein's Global Client Group and Private Wealth Business. During this call, we will be discussing certain financial measures that are not based on generally accepted Reconciliations of these non-GAAP measures to the most directly comparable GAAP measures and related definitions may be found on the investor relations portion of our website and in our earnings release slide presentation and financial supplement. I will now turn the call over to Mark.

Eric Bass: Joining me on today's call are Mark <unk>, President and Chief Executive Officer of Equitable Holdings, Robyn <unk>, Our Chief Financial Officer, Nick Lane, President of Equitable financial Jackie Marks Alliance Bernstein, as Chief Financial Officer, and owner airs on head of Alliance Bernstein Global client group.

Eric Bass: In private wealth business.

Eric Bass: During this call we will be discussing certain financial measures that are not based on generally accepted accounting principles also known as non-GAAP measures reconciliations of these non-GAAP measures to the most directly comparable GAAP measures and related definitions may be found on the Investor relations portion of our website and.

Eric Bass: Our earnings release slide presentation and financial supplement.

Eric Bass: I'll now turn the call over to Mark.

Mark Pearson: Good morning, and thank you for joining today's call. Equitable Holdings delivered strong first-quarter results, and I'm pleased that the organic growth momentum in our businesses is beginning to translate into higher earnings. Across Equitable and Alliance Bernstein, we continue to see strong demand for our retirement, asset management, and wealth management solutions, helped by favorable demographic trends and a supportive macro environment. This is enabling Equitable to generate strong value from new business, which will drive future growth in earnings and cash flows, while also delivering on our mission to help our clients live fulfilling lives and retire with dignity. Turning to slide three.

Mark: Good morning, and thank you for joining today's call equitable holdings delivered strong first quarter results and I'm pleased that the organic growth momentum in our businesses is beginning to translate into higher earnings.

Mark: Our cost equitable and alliance Bernstein, we continue to see strong demand for our retirement asset management and wealth management solutions.

Mark: <unk> by favorable demographic trends and a supportive macro environment.

Mark: This is enabling equitable to generate strong value of new business, which will drive future growth in earnings and cash flows while also delivering on our mission to help our clients, let's fulfilling lives and retire with dignity.

Mark: Turning to slide three.

Mark Pearson: First quarter non-GAAP operating earnings were $490 million, or $1.43 per share, which is up 49% year-over-year on a per-share basis. There were offsetting notable items in the quarter, and non-GAAP operating EPS after adjusting for those was also $1.43, which is up 18% compared to the prior year. As discussed last quarter, we expect non-gap EPS growth to accelerate in 2024, driven by strong organic growth, ongoing benefits from productivity saves and general account optimization, and easing headwinds from the adverse mortality and lower alternative investment returns experienced in 2023.

Mark: First quarter non-GAAP operating earnings were $419 million or $1 43 per share, which is up 49% year over year on a per share basis.

Mark: It will offsetting notable items in the quarter and non-GAAP operating EPS. After adjusting for notables was also $1 43.

Mark: Which is up 18% compared to the prior year.

Mark: As discussed last quarter, we expect non-GAAP EPS growth to accelerate in 2024, driven by strong organic growth ongoing benefits from productivity saves in general account optimization and.

Mark: And easing headwinds from the adverse mortality and lower alternative investment returns experienced in 2023.

Mark Pearson: You saw that this quarter, and we continue to forecast 12 to 15% annual EPS growth through 2027. Looking forward, Equitable and AB should both benefit from growth in assets under management and administration, which increased 13% year over year to $974 billion. In addition, the favorable interest rate environment remains a tailwind for retirement sales and investment income. Equitable also continues to consistently return capital. And in the first quarter, we bought back $253 million of stock and paid $73 million in common dividends.

Mark: You saw that this quarter and we continue to forecast, 12% to 15% annual EPS growth through 2020.

Mark: Looking forward <unk>.

Mark: And <unk> should both benefit from growth in assets under management, and administration, which increased 13% year over year to $974 billion.

Mark: In addition, the favorable interest rate environment remains a tailwind for the time and sales and investment income.

Mark: Ecuador also continues to consistently return capital ended the first quarter, we bought back $253 million of stock and paid $73 million of common dividends.

Mark Pearson: This equates to a total payout ratio of 68%, at the upper end of our 60 to 70% guidance. We ended the quarter with $1.9 billion of cash and liquid assets at the holding company, providing ample flexibility to both continue returning capital and take advantage of the attractive growth environment. Ecuador remains on track to generate $1.4 to $1.5 billion of cash in 2024, with roughly half of this coming from asset and wealth management.

Mark: This equates to a total payout ratio of 68% at the upper end about 60% to 70% guidance.

Mark: We ended the quarter with $1 9 billion of cash and liquid assets at the holding company, providing ample flexibility to both continue returning capital and take advantage of the attractive growth environment.

Mark: Ecuador remains on track to generate one four to $1 $5 billion of cash in 2020 full with roughly half of this coming from asset and wealth management.

Mark Pearson: Turning to our growth strategy, we continue to see good momentum in our core businesses while scaling emerging higher-growth businesses. In retirement, our largest business, we had another strong quarter with net inflows of $1.5 billion, which translates into a 5% annualized organic growth rate. Sales and deposits were up 42% year-over-year and continue to be driven by our spread-based Ryla product, although we're seeing growth across all products. Robin will expand on this later in our presentation. In asset management, AV's overall net flows were slightly positive, with very strong active net inflows of $3.7 billion, being partially offset by the loss of a large low-fee passive mandate.

Mark: Turning to our growth strategy, we continue to see good momentum in our core businesses, while scaling emerging higher growth businesses.

Mark: In retirement, our largest business, we had another strong quarter with net inflows of one 5 billion, which translates into a 5% annualized organic growth rate.

Mark: Sales and deposits were up 42% year over year and continue to be driven by our spread based viola product, although we're seeing growth across all products globally.

Mark: Robin will expand on this later in our presentation.

Mark: And asset management Ab's overall net flows were slightly positive with very strong active net inflows of $3 $7 billion being partially offset by the loss of a large low fee passive mandate.

Mark Pearson: Retail flows continue to be very strong, and private wealth also had a solid quarter. The institutional pipeline currently sits at $11.5 billion, with the majority in private market strategies. AB also closed the Bernstein Research Joint Venture on April 1, which will result in margin expansion of 200 to 250 basis points on an annualized basis.

Mark: Retail flows continue to be very strong and private wealth also had a solid quarter.

Mark: The institutional pipeline currently sits at 11 5 billion.

Mark: With the majority in private market strategies.

Mark: <unk> also closed the Bernstein research joint venture on April 1st, which will result in margin expansion of 200 to 250 basis points on an annualized basis.

Mark Pearson: Wealth management earnings continue to track well ahead of our 2027 target, helped by favorable markets and strong organic growth in fee-based investment accounts. Over the past year, the advisory business has grown 4% organically. This is slightly lower than the recent trend due to an advisory group departure this quarter, but the growth outlook remains strong with earnings up 34% compared to the prior year quarter and AUA up 22% to $92 billion. We all have to make good progress on our strategy to see future growth. AB received its China license earlier this year and launched its first mutual fund in March.

Mark: Wealth management earnings continued to track well ahead of our 2027 target helped by favorable markets and strong organic growth in fee based investment accounts.

Mark: Over the past year, the advisory business has grown 4% organically.

Mark: This is slightly lower than the recent trend due to an advisory group departure this quarter, but the growth outlook remained strong with earnings up 34% compared to the prior year quarter and.

Mark: Up 22% to $92 billion.

Mark: We've also made good progress on our strategy to seek future growth.

Mark: He received his China license earlier this year and launched its first mutual fund in March.

Mark Pearson: Additionally, we received initial flows from BlackRock's Life Path Paycheck offering in April and continue to be excited about the in-plan guaranteed growth opportunity. Before turning the call over to Robin, I'd like to spend a couple of minutes discussing the U.S. retirement market and the growth opportunities I see for Equitable and A.B. Please turn to slide four.

Mark: Additionally, we received initial flows from Blackhawks life path paycheck offering in April and continue to be excited about the implant guarantee growth opportunity.

Mark: Before turning the call over to Robyn I'd like to spend a couple of minutes discussing the U S with time at market and the growth opportunities I see for equitable and AP. Please turn to slide four.

Mark Pearson: I've had the privilege of working in retirement businesses across the globe, and the U.S. is by far the most attractive market I've seen for a few reasons. First, it's a huge market with over $35 trillion of assets, nearly 10 times the size of the next largest market. Secondly, there's a clear need for private market solutions. The U.S. has an aging population that is living longer, which necessitates a higher level of retirement savings.

Robyn: I've had the privilege of working in the time it businesses across the globe.

Robyn: In the U S is by far the most attractive market has seen for a few reasons.

Mark: First it's a huge market with over 35 trillion dollars of assets nearly 10 times the size of the next largest market.

Mark: Secondly, there is a clear need for private market solutions the.

Mark: The U S has an aging population that is living longer which necessitates a higher level of the time and savings.

Mark Pearson: Social Security will not meet this need, and the shift from defined benefit to defined contribution plans has transferred that savings burden to individuals. The lack of traditional pensions means that Americans also need to figure out how to convert their savings into lifetime income, which is something most people are not equipped to do on their own.

Mark: Social security will not meet this need and the shift from defined benefit to defined contribution plans has transferred that savings burden to individuals.

Mark: Lack of traditional pensions means that Americans also need to figure out how to convert these savings into lifetime income, which is something most people are not equipped to do on their own.

Mark: Solving this need presents a critical challenge for the country and is central to Equitable's mission.

Mark Pearson: We are reaching the peak period for baby boomer retirements, with 4.1 million Americans turning 65 every year through 2027. By 2050, the U.S. is projected to have a retirement gap of $137 trillion, by far the largest among developed countries. Turning to slide five.

Mark: We are reaching the peak period for baby boom over time, and with $4 1 million Americans turning 65 every year through 2027.

Mark: By 2050, the U S is projected to have over time at gap of 137 trillion.

Mark: By far the largest amongst developed countries.

Mark: Turning to slide five.

Mark Pearson: I'd like to focus on how Equitable and AB are positioned to capture this retirement opportunity through our unique integrated business model that combines wealth management, product manufacturing, and proprietary asset management. It all starts with our advice-driven model and ability to engage directly with our clients on their retirement savings, income, and intergenerational wealth transfer needs. Equitable has 4,300 affiliated advisors and access to over 14,000 actively producing third-party agents through targeted distribution relationships.

Mark: I'd like to focus on how equitable and ABL positioned to capture this retirement opportunity through our unique integrated business model that combines wealth management product manufacturing and proprietary asset management.

Mark: It all starts with our advice driven model and ability to engage directly with our clients on their retirement savings income and intergenerational wealth transfer needs.

Mark: <unk> has 4300 affiliated advisors and access to over 14000 accurately producing third party agents through targeted distribution relationships.

Mark Pearson: This enables us to reach a wide range of clients to provide tailored solutions, whether they are just starting their careers or in the midst of retirement. In our individual and group retirement businesses, we have chosen to focus on three segments of the retirement market that leverage our distribution strengths, have compelling growth potential, and offer attractive returns on capital. In individual retirement, we are the leading provider of registered index-linked annuities, ORILIS. We believe Violets offer a compelling consumer value proposition by providing an opportunity to grow retirement income while also having partial downside protection against market decline. From Equitable's perspective, Rylars is a spread-based, capital-like product, allowing us to generate 15% plus IRRs with a narrow range of output.

Mark: This enables us to reach a wide range of clients to provide tailored solutions, whether they are just starting their careers or in the midst of retirement.

Mark: In our individual and group retirement businesses, we have chosen to focus on three segments of the retirement market that leverage our distribution strengths have compelling growth potential and offer attractive returns on capital.

Mark: In individual retirement, we are the leading provider of registered index linked annuities or wireless.

Mark: We believe violence offer a compelling consumer value proposition by providing an opportunity to grow retirement income while also having partial downside protection against the market decline.

Mark: From Equitable's perspective, wireless our spread based capital light product, allowing us to generate 15% plus <unk>.

Mark: With a narrow range of outcomes.

Mark Pearson: Over the last 12 months, our individual retirement segment has delivered 8% organic growth while generating higher spread income and strong value of new business. Limmera projects Rylers to be the fastest growing segment of the annuity market over the next few years. We're also the market leader in providing supplemental retirement savings for K-12 educators. We operate through a worksite advice model with 1,100 dedicated advisors that understand educators' specific needs. And today, we work with over 900,000 teachers across 9,000 school districts.

Mark: Over the last 12 months, our individual retirement segment has delivered 8% organic growth, while generating higher spread income and strong value of new business.

Mark: La Mer projects why there has to be the fastest growing segment of the annuity market over the next few years.

Mark: We're also the market leader in providing supplemental retirement savings for K through 12 educators.

Mark: We operate through our Worksite advice model with 1100 dedicated devices that understand educators specific needs and today, we work with over 900000 teachers across 9000 school districts.

Mark Pearson: This is a steady growth market where equitable distribution provides a real competitive advantage. Finally, we are very excited about the emerging in-plan guarantee market. Passage of the SECURE Act makes it easier for plan sponsors to add a decumulation option to defined contribution plans by placing annuities inside 401k plans.

Mark: This is a steady growth market, where equitable distribution provides a real competitive advantage.

Mark: Finally, we are very excited about the emerging implant guarantee market.

Mark: The passage of the secure act makes it easier for plan sponsors to add a D. Cumulation option to defined contribution plans by placing annuities inside 401K plans.

Mark Pearson: Over $7 trillion of assets sit in 401k plans today, so this represents a tremendous opportunity for us and our industry. Equitable currently has offerings with BlackRock and AB, both leading asset managers in the 401k market. BlackRock has 14 plans with $27 billion of target date fund AUM signed up for its life path paycheck solution, and we received initial inflows in April. Beyond the business opportunity, we are very proud that, across Equitol and AB, we are innovating to address a real social need that all working people can understand. We can protect them from the risk of outliving their savings.

Mark: Over $7 trillion of assets sits in 401K plans today.

Mark: This represents a tremendous opportunity for us and our industry.

Mark: Equitable currently has offerings with Blackhawk and AEP, both leading asset managers in a 401K market.

Mark: Blackrock has 14 plans with $27 billion of target date fund AUM signed up for its life path Paychex solution and we received initial inflows in April.

Mark: Beyond the business opportunity, we are very proud that across equitable and AEP. We are innovating to address a real social need that all working people can understand we can protect them from the risk of outliving their savings.

Mark Pearson: Underpinning everything we do in retirement is one of Equitable's greatest assets, Alliance Bernstein. AB currently manages $123 billion of AUM for Equitable. And as we continue to grow in spread-based products like RILAs and in-plan annuities, AV will capture most of those general account inflows. AV also directly benefits from the growth in the retirement savings market as it manages over $200 billion of third-party retirement assets. Despite the challenges facing the active asset management industry, AB has delivered 2% average annual organic growth over the past five years, much better than most peers.

Mark: Underpinning everything we do in retirement is one of <unk> greatest assets Alliance Bernstein.

Mark: <unk> currently manages $123 billion of AUM for equitable and.

Mark: And as we continue to grow and spread based products like wireless and in plan annuities.

Mark: We will capture most of those general account inflows.

Mark: <unk> also directly benefits from the growth in retirement savings market as it manages over $200 billion of third party retirement assets.

Mark: Despite the challenges facing the active asset management industry.

Mark: Has delivered 2% average annual organic growth over the past five years much better than most peers.

Mark Pearson: Putting it all together, I truly believe Equitable is in a privileged position. The U.S. retirement market presents a huge growth opportunity, and Equitable is unique in being able to participate across distribution, product manufacturing, and asset management. I'll now turn it over to Robin to go through our results in more detail.

Mark: Putting it altogether.

Mark: Truly believe equitable is in a privileged position.

Mark: The U S retirement market presents a huge growth opportunity and equitable is unique in being able to participate across distribution product manufacturing and asset management.

Mark: I'll now turn it over to Robin to go through our results in more detail.

Robin Matthew Raju: Turning to slide six, I will highlight results for the quarter. On a consolidated basis, Equitable Holdings reported non-GAAP operating earnings of $490 million in the quarter, or $1.43 per share, up 49% year-over-year.

Robin: Turning to slide six I will highlight results for the quarter.

Robin: On a consolidated basis, its equitable holdings reported non-GAAP operating earnings of $490 million in the quarter or $1 43 per share up 49% year over year.

Robin: While we had a couple of notable items. These offset one another and non-GAAP EPS ex notable items was also $1 43 per share.

Robin Matthew Raju: While we had a couple of notable items, these offset one another, and non-GAAP EPSX was also $1.43 per share. This is up 18% on a year-over-year basis and 7% sequentially, as we're seeing the benefits of strong organic growth, favorable markets, and ongoing share repurchases reflected in the results. Details by segment are included in the appendix, but there are a few items I want to highlight.

Robin: This is up 18% on a year over year basis, and 7% sequentially as we're seeing the benefits of strong organic growth favorable markets and ongoing share repurchases reflected in the results.

Robin: Details by segment are included in India Appendix, but there are few items I wanted to highlight.

Robin Matthew Raju: Operating earnings increased on a year-over-year basis in each of our core businesses, indicating healthy fundamental trends across the company. Mortality was in line with expectations. As a reminder, we assume higher claims in the first quarter due to the impact of the winter flu season. We've now had two consecutive quarters where mortality has been in line with our expectations, which supports our view that the elevated claims experience in the first half of 2023 was a temporary pull forward.

Robin: Operating earnings increased on a year over year basis in each of our core businesses, indicating healthy fundamental trends across the company.

Robin: Mortality was in line with expectations as a reminder, we assume higher claims in the first quarter due to the impact from the winter flu season.

Robin: We've now had two consecutive quarters, where mortality has been in line with our expectations, which supports our view that the elevated claims experience in the first half of 2023 with a temporary pull forward.

Robin Matthew Raju: For the full year, we still expect Protection Solutions operating earnings of $200 to $300 million, with some volatility on a quarterly basis. Investment income was also up over $200 million year-over-year. Base net investment income continues to benefit from growth in the general account assets and higher new money yields, which were 180 basis points above the portfolio yield in the quarter. Annualized alternative returns were 5.8%, which is still below our 8 to 12% expectation but improved relative to recent quarters.

Robin: For the full year, we still expect protection solution to operating earnings of $200 million to $300 million with some volatility on a quarterly basis.

Robin: Investment income was also up over $200 million year over year.

Robin: Net investment income continues to benefit from growth in the general account assets and higher new money yields, which were 180 basis points above the portfolio yield in the quarter.

Robin: Annualized alternative returns were five 8%, which is still below our 8% to 12% expectation, but improved relative to recent quarters.

Robin Matthew Raju: Turning to taxes, we reported a consolidated tax rate of 19% for the first quarter, in line with our full year guidance. Our insurance segments had a tax rate of approximately 14%, which is below the 17% rate expected for the full year due to the timing of tax refund benefits.

Robin: Turning to taxes, we reported a consolidated tax rate of 19% for the first quarter in line with our full year guidance.

Robin: Our insurance segment had a tax rate of approximately 14%, which is below the 17% rate expected for the full year due to timing of tax refund benefit.

Robin Matthew Raju: On the other hand, AB had a slightly elevated tax rate in the quarter of 29%, which is above our full-year guidance of 27%. Net income was $114 million in the quarter, as the benefit from higher interest rates was more than offset by the impact of higher equity markets. Total assets under management and administration increased 13% year-over-year and 5% year-to-date, driven by equity market tailwinds and net inflows into retirement and wealth management.

Robin: On the other hand had a slightly elevated tax rate in the quarter of 29%, which is above our full year guidance of 27%.

Robin: Net income was $114 million in the quarter.

Robin: As the benefit from higher interest rates with more than offset by the impact of higher equity markets.

Robin: Total assets under management and administration increased 13% year over year, and 5% year to date, driven by equity market tailwind and net inflows in retirement and wealth management.

Robin Matthew Raju: We remain on track to achieve the general account yield enhancement and productivity targets outlined at our investor day and continue to execute against our strategic priorities. As of quarter end, we deployed $9.6 billion of our $20 billion commitment to AB's private markets platform. We expect to finish deploying the first $10 billion of the commitment in the second quarter. In April, AB closed the Bernstein Research Services Joint Mentor with SoftGem.

Robin: We remain on track to achieve the general account yield enhancement and productivity targets outlined at our Investor day, and continue to execute against our strategic priority.

Robin: As of quarter end, we deployed $9 6 billion of our $20 billion commitment to a b private markets platform.

Robin: We expect to finish deploying the first $10 billion of the commitment in the second quarter.

Robin: In April.

Robin: Close the Bernstein research services joint venture with soft Jen <unk>.

Robin Matthew Raju: This transaction will have an immaterial impact on go-forward earnings but improves AB's operating margin by 200 to 250 basis points on an annual basis. In the first quarter, AV's adjusted operating margin improved to 30%, supported by growth in AUM and active net inflows of $3.7 billion during the quarter. Turning to slide 7.

Robin: This transaction will have an immaterial impact on go forward earnings, but improved operating margin by 200 to 250 basis points on an annual basis.

Robin: In the first quarter <unk> adjusted operating margin improved to 30%.

Robin: Courted by growth in AUM and active net inflows of $3 7 billion during the quarter.

Robin: Turning to slide seven.

Robin Matthew Raju: The combination of robust retirement sales and net flows, supportive interest rates, and equity market tailwinds is translating into higher earnings. Spread income is up 26% year-over-year in individual retirement and up 48% in group retirement. This reflects a shift in our retirement business towards more spread-based products driven by the growth in Ryla sales. As a reminder, Ryla products provide good economic returns for shareholders and have a very different risk profile than variable annuities sold pre-financial crisis. Unfortunately, investors still tend to lump all BAs together, so I want to spend a minute highlighting why we like the Ryla product.

Robin: The combination of robust retirement sales and net flows supported interest rate and equity market <unk> are translating into higher earnings.

Robin: Spread income is up 26% year over year in individual retirement and up 48% in group retirement.

Robin: <unk> reflects a shift in our retirement business towards more spread based products driven by the growth in <unk> sales.

Robin: As a reminder, <unk> products provide good economic returns for shareholders and has a very different risk profile than variable annuities sold pre financial crisis.

Robin: Unfortunately investors still tend to lump all together so.

Robin: So I want to spend a minute highlighting why we like the <unk> product.

Robin Matthew Raju: Riley's addresses a client need for a protected retirement solution. And from our perspective, it is purely a spread-based product, similar to a fixed annuity. All the assets are invested in the general account, and a product fixed maturity date and short average duration enable a tight ALM match. The equity market exposure is fully hedged at the time of issue. We reprice the product every two weeks based on current interest rates and option costs, ensuring we can deliver a consistent IRR of at least 15%. Finally, rivalries are capital light for equitable and have less than half the required capital of a fixed annuity.

Robin: <unk> addressed the client need for protected retirement solutions.

Robin: And from our perspective, it is purely it's Brad based product.

Robin: Blair to fixed annuities.

Robin: All the assets are invested in the general account.

Robin: The product maturity date, and short average duration enabled tight <unk> matching.

Robin: The equity market exposure is fully hedged at the time of issuance.

Robin: We re priced the product every two weeks based on current interest rates and option costs, ensuring we can deliver a consistent IRR of at least 15%.

Robin: Finally, Reilly is a capital light for equitable and at less than half the required capital the fixed annuity.

Robin Matthew Raju: RILAs now account for roughly 50% of individual retirement AUM, and growth in this product has been a key driver of higher net investment margins. In addition, we're seeing the benefit from higher interest rates and actions we've taken to enhance portfolio yields by allocating more of our general account to private assets managed by Alliance Furniture. Looking forward, we expect growth in spread income to roughly track growth in general account assets as spread stabilizes. Individual retirement had an 8% organic growth rate over the past year. And this is even faster if you look at spread-based assets.

Robin: <unk> now account for roughly 50% of individual retirement.

Robin: And growth in this product has been a key driver of higher net investment margin.

Robin: In addition, we are seeing the benefit from higher interest rates.

Robin: And actions, we've taken to enhance portfolio yields by allocating more of our general account to private assets managed by Alliance Bernstein.

Robin: Looking forward, we expect growth in spread income to roughly track growth in general account assets as spreads stabilized.

Robin: Individual retirement had an 8% organic growth rate over the past year.

Robin: And it does even faster if you look at spread based assets.

Robin Matthew Raju: In group retirement, we expect the general account growth to accelerate as inflows from BlackRock's life path paychecks have begun in the second quarter. It's important to note that this growth in general account assets will also directly benefit AV, which manages the vast majority of Equitable's portfolio. With the help of Equitable, AB's private markets business has grown to $63 billion, and we expect this to reach $90 to $100 billion by 2027. These are high-margin assets, and the growth in private markets will support ABC rates and boost margins over time.

Robin: In group retirement, we expect the general count growth to accelerate at inflows from Blackrock Lightpath paycheck had begun in the second quarter.

Robin: It is important to note that this growth in the general account assets.

Robin: So directly benefit.

Robin: Which manages the vast majority of <unk> portfolio.

Robin: With the help of equitable Ab's private markets business has grown to $63 billion and we expect it to reach $90 billion to $100 billion by 2027.

Robin: These are high margin assets and the growth in private market will support.

Robin: The rate and boost margins overtime.

Robin Matthew Raju: While retirement new business has shifted more towards spread-based products, we still have a sizable block of in-force policies and separate accounts that generate fee-based income and are benefiting from strong market returns. Similarly, we are seeing healthy year-over-year growth in fee-based revenues for AB and Wealth Management, which can seize a charge based on average AUM levels. They should continue to build if markets remain at or above current levels

Robin: While retirement, new business has shifted more towards spread based products, we still have a sizable block of in force policies and separate accounts that generate fee based income and are benefiting from strong market returns.

Robin: Similarly, we are seeing healthy year over year growth in fee based revenue for ABB and wealth management.

Robin: Fees are charged based on average AUM level.

Robin: It continued to build if markets remain at or above current levels.

Robin Matthew Raju: Finally, as I noted earlier, we saw some recovery in variable investment income this quarter, as our ALTS portfolio delivered a 5.8% annualized return. We currently expect second quarter results to be similar to the first quarter, with full-year returns coming in slightly below our 8 to 12 percent target range. Turning to slide 8, Equitable continues to generate predictable cash flow and consistently return capital to shareholders. During the first quarter, we returned $326 million, which equates to a 68% payout ratio at the upper end of our 60 to 70% non-GAAP operating earnings guidance.

Robin: Finally, as I noted earlier, we saw some recovery in variable investment income this quarter as our alts portfolio delivered a five 8% annualized return.

Robin: We currently expect second quarter results to be similar to the first quarter with full year returns coming in slightly below our 8% to 12% target range.

Robin: Turning to slide eight <unk> continues to generate predictable cash flow and consistently return capital to shareholders.

Robin: During the first quarter, we returned 326 million, which equates to a 68% payout ratio at the upper end of our 60% to 70% non-GAAP operating earnings guidance.

Robin Matthew Raju: Buybacks continue to be an accretive form of capital return, and we have reduced our share count by approximately 9% over the last 12 months. We also plan to increase the quarterly cash dividend on common shares to $0.24 in May pending Board approval, which will maintain our annual dividend payout at approximately $300 million. We closed the quarter with $1.9 billion of cash and liquid assets at holdings, which remains above our minimum target.

Robin: Buybacks continued to be an accretive form of capital return and we have reduced our share count by approximately 9% over the last 12 months.

Robin: We also plan to increase the quarterly cash dividend on common shares to 20 <unk> in may.

Robin: Pending board approval, which will maintain our annual dividend payout at approximately $300 million.

Robin: We closed the quarter with $1 9 billion of cash and liquid assets at holdings, which remains above our minimum target.

Robin Matthew Raju: Our insurance subsidiaries are also well capitalized. We ended the year with a combined RBC ratio of 411% and an NAIC-based RBC ratio of over 425%. This gives us ample capital flexibility to fund growth, and upstream cash, and meet our payout ratio commitment. We continue to forecast $1.4 to $1.5 billion of cash generation this year. With about 50% of that coming from our asset and wealth management business. Finally, AB received a $304 million equalization payment from the Closing of Bernstein Research Joint Venture, which was used to pay down debt. There is no impact on Equitable Holdings' cash position, but this transaction provides AB with more financial flexibility in the future. Now, let me turn the call back over to Mark for closing remarks. Thanks for all.

Robin: Our insurance subsidiaries are also well capitalized we ended the year with a combined RBC ratio of 411%.

Robin: And then any IP based RBC ratio of over 425%.

Robin: This gives us ample capital flexibility to fund growth upstream cash and meet our payout ratio of amendments.

Robin: We continue to forecast one four to one 5 billion of cash generation this year.

Robin: With about 50% of that coming from our asset and wealth management businesses.

Robin: Finally, <unk> received at 304 million equalization payment from the closing of a bird in research joint venture.

Robin: Which you used to pay down debt.

Robin: There is no impact equitable holdings cash position, but it transaction provides more financial flexibility in the future.

Robin: Now, let me turn the call back over to Mark for closing remarks.

Mark Pearson: Thanks, Robin. Equitable delivered strong first-quarter results as organic growth momentum across our businesses is beginning to translate into higher non-GAAP EPS, which increased 18% versus first quarter 23, after adjusting for notable items in both periods. We also delivered on our 60 to 70% payout ratio target and are on track for $1.4 to $1.5 billion of cash generation in 2024, with approximately half of that coming from non-insurance businesses. Looking ahead, I remain confident in our growth strategy and ability to deliver on our 2027 financial guidance.

Mark: Thanks Robin.

Mark: Equitable delivered strong first quarter results as organic growth momentum across our businesses is beginning to translate into higher non-GAAP, EPS, which increased 18% versus first quarter 2003. After adjusting for notable items in both periods.

Mark: We also delivered on our $60 to 70% payout ratio target and are on track for one four to $1 5 billion of cash generation in 2020 full with approximately half of that coming from non insurance businesses.

Mark: Looking ahead I remain confident in our growth strategy and ability to deliver on our 2027 financial guidance.

Mark Pearson: This is the best environment we've seen for growth in well over a decade, and Equitable's unique ability to capture the full value chain across distribution, manufacturing, and asset management leaves us well positioned to take advantage of it.

Mark: This is the best environment, we've seen for growth in well over a decade in equitable's unique ability to capture the full value chain across distribution manufacturing and asset management leaves us well positioned to take advantage of it.

Speaker Change: We will now open the line for questions.

Dennis: At this time, I would like to remind everyone in order to ask a question, simply press star and then the number one on your telephone keypad. For first questions from the line of Suneet Kamath with Jefferies, please go ahead.

Speaker Change: At this time I would like to remind everyone in order to ask a question simply press Star then the number one the onto your telephone keypad.

Speaker Change: Our first question is from the line of <unk>, who need to come up with Jefferies. Please go ahead.

Suneet Laxman L. Kamath: Thanks. Good morning. I wanted to start with the individual retirement net flows. I think this is probably the second highest level we've seen in a long time. Can you just provide some color in terms of where that demand is coming from? Are these 401k rollover funds, or are these other annuities that are rolling into RILA?

<unk>: Thanks, Good morning, I wanted to start with the individual retirement net flows I think this is the second highest level, we've seen probably in a long time can you just provide some color in terms of where that demand is coming from are these 401, K rollover funds or are these other annuities.

<unk>: That are rolling into <unk>, just some color on that would be helpful.

Suneet Laxman L. Kamath: Just some color on that would be helpful.

Nicholas Burritt Lane: Sure, this is Nick. We see continued demand coming from the structural demographics that Mark talked about. These are pre-retirees or retirees who are looking for protected equity stories. This is coming out of their 401k's target dates as they approach the next chapter of their lives.

Nicholas Burritt Lane: Sure This is Nick.

Nicholas Burritt Lane: We see continued demand coming from the structural demographics that Barak talked about these are pre retirees are retirees that are looking for protected equity storage. This is coming out of 401K's target dates as they approach the next chapter of their lives.

Nicholas Burritt Lane: As Mark highlighted, this is the fastest-growing segment of the market, according to LIMRA. We saw that play out relative to a 50% increase year-over-year in sales and near-record net flows. You know, as a pioneer in the market, we believe we're in a privileged position to continue to capture this growing demand. Given our history of innovation, we're a pioneer in this market. Our privileged distribution is not just the demand, but having the distribution to meet that demand, that's both through equitable advisors and the 14,000 other active sellers through third-party networks, plus the asset management capabilities of Alliance Bernstein. So we believe, you know, these are assets few others possess, and we're in a privileged position to capture a disproportionate share of the value that's emerging.

Nicholas Burritt Lane: As Mark highlighted this is the fastest growing segment of the market. According to <unk>, we saw that show up.

Suneet Laxman L. Kamath: Got it. Okay, that makes sense.

Nicholas Burritt Lane: Relative to a 50% increase year over year in sales and the near record net flows.

Nicholas Burritt Lane: As a pioneer in the market. We believe we're in a privileged position to continue to capture this growing demand given our history of innovation, we are a pioneer in this market.

Nicholas Burritt Lane: Our privilege distribution, it's not.

Nicholas Burritt Lane: Not just the demand, but having the distribution to meet that demand thats, both through equitable advisers and the 14000.

Nicholas Burritt Lane: Other active sellers through third party networks.

Nicholas Burritt Lane: Plus the asset management capabilities of Alliance Bernstein. So we believe these are as such a few others possess and we're in a privileged position to capture a disproportionate share of the value that's emerging.

Suneet Laxman L. Kamath: And then I guess my second question for Robin, you know, $1.9 billion of cash at the holding company, and you're expecting another $1.4 billion or so this year. So that's going to knock you over $3 billion plus. I mean, at what point do you feel comfortable drawing down some of that excess, especially as we think about that target of $500 million? It just seems like you're going to be traveling well north of that target for some time unless you start redeploying that capital.

Speaker Change: Got it okay that makes sense and then I guess my second question for Robyn.

Nicholas Burritt Lane: $1 9 billion of cash at the holding company Youre expecting another $1 4 billion or so this year.

Robyn: So thats going to knock it out $3 billion plus I mean at what point do you feel comfortable drawing down some of that excess, especially as we think about that target of $500 million. It just seems like you're going to be traveling well north of that target for some time unless you start redeploying that capital.

Robin Matthew Raju: Sure. Thanks, Anit.

Robin Matthew Raju: Thanks. Sure. Thanks, Ani.

Speaker Change: Sure. Thanks, Annie we feel good about the strong capital position with $1 9 billion at the Holdco. It gives us confidence that we'll be able to capitalize on the attractive growth environment that Nick just highlighted while also delivering our 60% to 70% payout ratio target keep in mind during the quarter, we funded a record level of new sales and.

Robin Matthew Raju: We feel good about the strong capital position with $1.9 billion at the Holdco. It gives us confidence that we'll be able to capitalize on the attractive growth environment that Nick just highlighted while also delivering our 60 to 70% payout ratio target. Keep in mind that during the quarter, we funded a record level of new sales and individual retirement, and we have a strong new business pipeline for the rest of the year, including the launch of the BlackRock Lifepath Paycheck product.

Speaker Change: Your retirement, and we have a strong new business pipeline for the rest of the year, including the launch of the Blackrock Lightpath paycheck product at the same time, we paid out 68% of our operating earnings at the higher end of our payout ratio.

Robin Matthew Raju: At the same time, we paid out 68% of our operating earnings. That's at the higher end of our payout ratio. So, continue to expect us to draw down naturally that Holdco cash as we continue to pay out on the higher end of the ratio, and we want to be prepared also beyond both the offense and the defense. As we know, markets can move quickly on us in both directions. So, we'll be prepared to act either way, but we're pleased to be in this strong capital position. Your next questions from the line of Elyse Greenspan,

Speaker Change: So continue to expect us to drawdown naturally that holdco cash as we continue to pay out on the higher end of the ratio and we want to be prepared also beyond both the offense, but the defense as we know markets can move quickly on us in both directions. So we'll be prepared to add either way, but we're pleased to be in a strong capital position.

Speaker Change: Alright. Thanks.

Dennis: Your next question is from the line of Elyse Greenspan with Wells Fargo. Please go ahead.

Robyn: Your next question is from the line of Elyse Greenspan with Wells Fargo. Please go ahead.

Elyse Beth Greenspan: Hi, Thanks.

Elyse Beth Greenspan: First question.

Elyse Beth Greenspan: Okay.

Elyse Beth Greenspan: Robert I know you.

Elyse Beth Greenspan: 290 million guidance.

Elyse Beth Greenspan: It sounds like.

Elyse Beth Greenspan: Elevated mortality has gone away over the last couple of lease.

Dennis: Elyse. Elyse, I'm sorry.

Speaker Change: I'm sorry.

Robert: Yes, there you go sorry, yes. Thank you.

Speaker Change: Sorry, Yes go ahead, sorry, my apologies I was asking about protection solution. So you reaffirmed the.

Speaker Change: The full year earnings guide that you wanted to $300 million and obviously its been two good quarters from a mortality perspective I know in the past you mentioned looking into potential reinsurance for that business, but is that now no longer under.

Speaker Change: Iteration just given.

Speaker Change: That the pull forward, perhaps of mortality is a thing of the past.

Elyse Beth Greenspan: Yeah, there you go. Sorry. Yes. Thank you.

Speaker Change: Thanks, David So after 2023, which was challenging for us.

Speaker Change: We're pleased to see two consecutive quarters of claims on a net basis being in line with our expectations.

David: And the first quarter as we highlighted in the call. We do typically expect slightly worse mortality due to the seasonality from the flu.

Speaker Change: But we should normalize for the full year and that's reflected in our $2 million to $300 million full year guidance that we've given on the potential for reinsurance. We continue to have constructive discussions with reinsurers and are evaluating multiple options improve profitability and reduce the quarter to quarter noise in our protection business.

Elyse Beth Greenspan: Sorry, my apologies. I was asking about protection solutions.

Speaker Change: Our goal for this business is continue to increase margins and reduce volatility over time and.

Speaker Change: If we continue to see consistent mortality over the next few quarters.

Speaker Change: We will continue to reevaluate our guidance for the longer term for 2025.

Speaker Change: Thanks, and then my second question is on.

Speaker Change: Alliance Bernstein flows were positive in the quarter.

Speaker Change: And you guys highlighted.

Speaker Change: $7 5 billion institutional pipeline, just trying to get a sense of just the trajectory in inflows.

Speaker Change: Now that you expect for this business over the rest of this year.

Elyse Beth Greenspan: So you reaffirmed the full year earnings guide, the 200 to 300 million. And obviously, it's been two good quarters from a mortality perspective. I know, in the past, you mentioned looking into potential re-insurance for that business. But is that now no longer under consideration, just given, you know, that the pull forward, perhaps, of mortality is a thing of the past?

Speaker Change: Honor your underlying op.

Robin Matthew Raju: Thanks. So after 2023, which was challenging for us, we were pleased to see two consecutive quarters of claims on a net basis being in line with our expectations. And the first quarter, as we highlighted in the call, we do typically expect slightly worse mortality due to the seasonality from the flu, but we should normalize for the full year, and that's reflected in our $200 to $300 million full year guidance that we've given.

Robin Matthew Raju: On the potential for reinsurance, we continue to have constructive discussions with reinsurers and are evaluating multiple options to improve profitability and reduce the quarter-to-quarter noise in our protection business. Our goal for this business is to continue to increase margins and reduce volatility over time. And if we continue to see consistent mortality over the next few quarters, we'll continue to reevaluate our guidance for the longer term for 2025.

Elyse Beth Greenspan: Thanks, and then my second question is on, you know, Alliance Bernstein's flows were positive in the quarter, and you guys highlighted the 11.5 billion institutional pipeline. Just trying to get a sense of, you know, just the trajectory and flows that you expect for this business over the rest of this year.

Speaker Change: Sure.

Seth Bernstein: Hi owners speaking from Alliance Bernstein, Yes, Youre right.

Honor: Strong active full quarter in Q1.

Onur Erzan: Onur, you're on the line. I'll pass it to you. Sure.

Seth Bernstein: This was supported by a very strong 77 $4 billion of net flows in fixed income and $1 $1 billion of net flows in private alternatives.

Onur Erzan: Sure. Hi Onur, speaking from Alliance Bernstein. Yes, you're right.

Onur Erzan: We had a strong active flow quarter in Q1. This was supported by a very strong $7.4 billion of net flows in fixed income and $1.1 billion of net flows in private alternatives. In terms of the rest of the year, we expect to see continued flows into our fixed income franchise. This includes both our taxable fixed income franchise in Asia and Japan, as well as our mini-franchise in U.S. retail. And then, on the alternative side, we have several new product launches.

Speaker Change: In terms of the rest of the year, we expect to see continued flows into our fixed income franchise. This includes ball dollar taxable fixed income franchise within Asia, Japan, as well as our Muni.

Seth Bernstein: Franchise in.

Seth Bernstein: U S retail and then on the alternative side, we have several new product launches we have in the soft close four hour carve our flagship funds and then we just had.

Onur Erzan: We are in the soft close for our Carvel flagship fund, and then we just had the first semi-liquid product launching in U.S. retail. So as a result, we expect those fixed income and private outflows to continue into the rest of the year. Inequities, particularly institutional, there's always further unpredictability, given the lumpy nature of that, both on the inflows and outflows. And we have had a couple of outflows in the past. But our Japanese franchise, which is a very successful U.S. equity presence there, continues to flow positively.

Seth Bernstein: First semi liquid product launching in U S retail.

Seth Bernstein: So as a result, we expect gross income in private salt well to continue into the rest of the year in equities, particularly institutional there's always further unpredictable at Thanksgiving.

Seth Bernstein: Lumpy nature of that both on the inflows and outflows and we had a couple of outflows in the past.

Seth Bernstein: But our Japanese franchise, which is the rate of successful U S. Equity presence there continues to flow of positive news. So although equities is more mixed with.

Onur Erzan: So although equities are more mixed with higher valuations and an uncertain macro environment, we see definitely some areas of strength, like our strong Japanese franchise. So we're all feeling pretty good about the past quarter, as well as what we have seen so far in the second quarter, which gives us optimism for the rest.

Seth Bernstein: Further valuations and uncertain macro environment, we see definitely.

Seth Bernstein: Some areas of strength like our strong Japanese franchise. So we're all feeling pretty good about the.

Seth Bernstein: Past quarter as well as what we have seen so far in the second quarter, which gives us optimism for the rest of the year.

Elyse Beth Greenspan: Thank you.

Speaker Change: Thank you.

Dennis: Your next question is from the line of Ryan Krueger with KBW. Please go ahead. Hey, thanks.

Seth Bernstein: Your next question is from the line of Ryan Krueger with K B W. Please go ahead.

Ryan Joel Krueger: Hey, thanks. Good morning. My first question was on AB margins. The 200 to 250 basis points uplift from the stock gen transaction, is that, should we start with the 1Q margin that was more around 28% if you back out the one-time expense benefit? Jackie, I'll pass it to you. Thanks, Robin. Yes, so starting with the Q, one Q,

Ryan Joel Krueger: Hey, Thanks. Good morning. My first question was on margins the 200 to 250 basis point uplift from.

Ryan Joel Krueger: From the the trend the stock and transaction is that should we start with.

Ryan Joel Krueger: The <unk> margin that was more around 28% if you back out the one time expense benefit.

Ryan Joel Krueger: Yes.

Ryan Joel Krueger: With 2000.

Ryan Joel Krueger: Jackie, I'll pass it to you. Thanks, Robin.

Ryan Joel Krueger: Jackie I'll pass it there.

Jackie Marks: Thanks Robyn.

Jackie Marks: Yes, so starting with <unk>.

Ryan Joel Krueger: The Q1 Q.

Ryan Joel Krueger: <unk> margin included obviously, the one time benefit.

Ryan Joel Krueger: You back out.

Ryan Joel Krueger: Regarding margin before we factor in the removal.

Ryan Joel Krueger: Bernstein Research services from Q2 onwards, that's where you're factoring the annualized 200 and 250 basis point.

Ryan Joel Krueger: Perfect.

Ryan Joel Krueger: Okay, got it. That would imply a low, a low 30% margin kind of as the starting point for all of SQL. Yes, that's correct. Okay, got it.

Ryan Joel Krueger: Okay got it that that would imply like a low 30% margin kind of as the starting point all else equal.

Speaker Change: Yes, that's correct.

Ryan Joel Krueger: And then it looked like you had $106 million in cost of insurance litigation impact in the quarter, at least on a gap basis. Did that have an impact on your statutory capital, or was there already a reserve that was established for that? Sure, thanks.

Speaker Change: Okay got it thanks and then.

Ryan Joel Krueger: It looked like you had.

Ryan Joel Krueger: $106 million.

Ryan Joel Krueger: Cost of insurance litigation.

Ryan Joel Krueger: Packed in the quarter at least on a GAAP basis was that did that have.

Ryan Joel Krueger: Impact to your statutory capital or was already a reserve that was established for that.

Robin Matthew Raju: Sure. Thanks, Ryan. I'll take that.

Speaker Change: Sure. Thanks, Ryan I'll take that Jay just on the cost of insurance. We raised in 2016 on policies that had over 1 million face amount of <unk> hundred 70 and older. Those are policies that were issued between 2004 to 2007.

Robin Matthew Raju: So just on the cost of insurance, we raised COIs in 2016 on policies that had over 1 million face amount and issue ages were 70 and older. Those were policies that were issued between 2004 and 2007. The total value of that increase for equitable was 1.3 billion, so pretty sizable. Over the last few years, we've made accruals during the litigation process that we have, and we expect to give back roughly half of the value that we've obtained. And we don't expect any additional accruals at this time, nor do we expect any impact on our go forward guidance.

Speaker Change: Total value of that increase story for equitable was $1 3 billion.

Speaker Change: Pretty sizable.

Speaker Change: Over the last few years, we've made accruals during the litigation process that we have and we expect to get back roughly half of the value that we've obtained and we don't expect any additional accruals at this time and no impact to our go forward guidance.

Speaker Change: Okay, great. Thank you.

Jamminder Singh Bhullar: Our next question is from the line of Jimmy Bhullar with JP Morgan Securities. Please go ahead.

Speaker Change: Your next question is from the line of Jimmy Butler with Jpmorgan Securities. Please go ahead.

Jamminder Singh Bhullar: Thanks, good morning. Hey, Robin, just to clarify, the 106 million, is that a stat impact as well, or did you say that there was not a, I understand you said nothing would go forward, but. And thus far, is it in Stat as well, or is it not a Stat M2?

Unknown Attendee: Thanks, Good morning, Robin just to clarify the $106 million is that has that impact as well or did you said there was not I understand you said nothing go forward, but.

Ryan Joel Krueger: And.

Unknown Attendee: Thus far is it instead as well or is it not a stat impact.

Robin Matthew Raju: It is, and it's accrued under Stat as well, the $106 million, but also the value that we obtained for the policies of $1.3 billion for the total increase, that's reflected in our balance sheet as well.

Unknown Attendee: It is it's accrued under stat, as well with $106 million.

Unknown Attendee: But also the value that we obtained through the policies of $1 3 billion for a total increase and thats reflected in our balance sheet as well.

Jamminder Singh Bhullar: Got it. And then just on the group retirement business, can you talk about the drivers of the week close there and what's going on and then also the related impact that you expect of that on your future revenues and margins?

Speaker Change: Got it and then just on the group retirement business can you talk about the drivers of the weak close there and.

Speaker Change: What's going on and then also the related impact.

Ryan Joel Krueger: That you expect of that on your future revenues and margin.

Nicholas Burritt Lane: Great, this is Nick. To start, our group retirement business is comprised of three worksite lines: tax-exempt, corporate, and institutional, which is reported in that segment. In our tax-exempt business, as Mark referenced, we're the number one provider of K-12 supplemental retirement plans with slots in 9,000 school districts and serving over 900,000 teachers with 1,100 advisors. The teachers that work with advisors have 70% higher contribution levels, resulting in strong consumer value and a barrier to entry.

Nicholas Burritt Lane: Great. This is Nick.

Nicholas Burritt Lane: To start our group retirement business is comprised of three Worksite line tax exempt corporate.

Nicholas Burritt Lane: And institutional which is reported in that segment and our tax exempt business.

Nicholas Burritt Lane: As Mark referenced we're the number one provider in K 12, supplemental retirement plans with slots and 9000 school districts and serving over 900000 teachers with 1100 advisors.

Nicholas Burritt Lane: As a work with advisors have 70% higher contribution levels resulted in strong consumer value and barriers to entry and tax exempt in the first quarter. We saw first year premium up 50% with positive flows in that line.

Nicholas Burritt Lane: In tax-exempt, in the first quarter, we saw a first-year premium up 50% with positive flows in that line, based on the activity from last year when schools fully reopened post-COVID. So we would expect steady, consistent, and organic growth.

Nicholas Burritt Lane: Based on the activity from last year when schools fully reopened.

Nicholas Burritt Lane: Post Covid. So we would expect steady consistent organic single digit growth with solid margins continuing in that area.

Nicholas Burritt Lane: Single-digit growth with solid margins continuing in that area. However, similar to the industry, higher interest rates have had an impact on net flows. Within the broader group retirement market, we saw higher outflows primarily coming from our corporate line and discontinued other lines. A higher account balance is driven by higher equities. And then older clients that had asset concentrations in the general investment options leave, which receives guaranteed rates. I would note that within the outflows, 25% of the outflows were participant-driven from clients using the products.

Nicholas Burritt Lane: Similar to the industry higher interest rates have had an impact on net flows within the broader group retirement market, we saw higher outflows, primarily coming from our corporate line and discontinued other.

Nicholas Burritt Lane: Higher account balances driven by higher equities, and then older age clients that had asset concentrations in the general investment option sleeve, which receives get guaranteed rates I would note that within the outflows 25% of the outflows were participant driven.

Nicholas Burritt Lane: From clients using the products.

Nicholas Burritt Lane: As intended for retirement income, and of the remainder, roughly 50% are being retained within equitable advisors in other product lines as their needs change under a fiduciary standard. So, finally, you know, we remain confident in the organic growth of our tax-exempt business, and we would expect to see new flows emerge in the institutional business line, given our partnership with AB and BlackRock that Mark referenced earlier in the call.

Nicholas Burritt Lane: As intended for retirement income and if the remainder roughly 50% are being retained within the equitable advisers and other product lines as their needs change under a fiduciary standard.

Speaker Change: So finally.

Nicholas Burritt Lane: We remain confident in the organic growth of our tax exempt and we would expect to see new flows are merged in the institutional business line, given our partnership with ABB and Blackrock that Mark referenced.

Nicholas Burritt Lane: Earlier in the call.

Jamminder Singh Bhullar: And then just lastly, are you able to comment on the impact of the DOL rule on your business? I realize the majority of your products weren't affected, but any sort of positives and or negatives from the rule? Sure. You know.

Nicholas Burritt Lane: And then just lastly are you able to comment on the impact of the Dol rule on your business I realize the majority of our products weren't affected but any sort of positives and negatives from the room.

Nicholas Burritt Lane: Sure, you know, while the rule had some minor adjustments, there were no material changes, so as a result, our views on the impact haven't changed. As you mentioned, we see the biggest impact on companies that sell non-registered products through non-registered distribution channels. At Equitable, we focus on registered securities through registered broker-dealer channels. Currently, Equitable Advisors already operates under SEC Reg D.I. fiduciary standard and PT 2020-02, so we don't see a material impact. With that said, the broader industry has concerns about the process and the impact. That's a consumer issue, so we expect there to be litigation going forward, and we'll continue to monitor the situation.

Nicholas Burritt Lane: Sure.

Nicholas Burritt Lane: While the rule had some minor adjustments there were no material changes so as a result, our views on the impact hasn't changed as you mentioned, we see the biggest impact on companies that sell non registered products through non registered distribution channels at equitable we focus.

Nicholas Burritt Lane: Registered securities through registered broker dealer channels currently equitable advisers already operates under the SEC fiduciary standard and PT 2022.

Nicholas Burritt Lane: So we don't see a material impact.

Nicholas Burritt Lane: With that said the broader industry has concerns on the process and the impact.

Nicholas Burritt Lane: That's a consumer so we expect there to be Citic litigation going forward and we'll continue to monitor the situations.

Speaker Change: Thank you.

Dennis: Your next question is from the line of Tom Gallagher with Evercore ISI. Please go ahead.

Nicholas Burritt Lane: Your next question is from the line of Tom Gallagher with Evercore ISI. Please go ahead.

Thomas George Gallagher: Good morning. My first question is just on this BlackRock LifePath paycheck roll out. Should we expect this to move the needle on group retirement flows in 2Q, or is this going to be more modest and incremental?

Thomas George Gallagher: Good morning first question is just on this Blackrock.

Thomas George Gallagher: Life paths pay check.

Thomas George Gallagher: Rollout.

Thomas George Gallagher: Should we expect this to move the needle on group retirement flows into <unk> or is this going to be more modest than incremental.

Mark Pearson: Thanks, Tom. This is Mark Pearson.

Thomas George Gallagher: Thanks, Tom This mall peers.

Speaker Change: Very bullish on this part of our business.

Nicholas Burritt Lane: <unk> opportunity as you know the secure it makes it easier for sponsors to added the accumulation.

Mark Pearson: Look, we're very bullish on this part of our business, the in-plan guarantee opportunity. As you know, the SECURE Act makes it easier for sponsors to add a decumulation option to their plans. And it's going to give us significant long-term growth potential. We're very, very bullish. We've already received flows from the BlackRock partnership we have. We will start to report those flows at the end of Q2. And we know that BlackRock has been out there and told the market they have commitments from 14 plans with over $25 billion of AUM in target date funds.

Nicholas Burritt Lane: Option, and it's going to give us significant long term growth potential and that we're very very bullish.

Speaker Change: We've already received.

Nicholas Burritt Lane: Flows from the Blackhawk.

Nicholas Burritt Lane: The partnership we have.

Speaker Change: We will.

Speaker Change: Start to report those at the end of Q2.

Speaker Change: And we know that Black Hawk has been out there and told the market. They have commitments from 14 plans with over $25 billion of AUM in target date funds. So.

Mark Pearson: So of those plans, we will start to receive an allocation for the remainder of this year for clients aged 55 and above. So I think it will be meaningful in terms of net flows. It will take a little bit of time to come through as a meaningful contribution to earnings, though, but in terms of flows, we'll start to see it this year, and we're very bullish on it.

Speaker Change: All of those plans, we will start to receive an allocation the remainder of this year for clients age 55.

Speaker Change: No.

Speaker Change: So I think it will be meaningful net flows it will take a little bit of time to come through as a meaningful contribution to earnings.

Speaker Change: But in terms of flows will start to see it this year and we're very bullish on that.

Speaker Change: That's good color. Thanks, Marc and then Robin I just wanted to come back as a follow up to Ryan's question on the cost of insurance charges. So I just wanted to make sure I understood. It. So 1 billion three was the ultimate benefit you got from the re pricing on that block you were referencing and <unk>.

Thomas George Gallagher: That's a good color. Thanks, Mark. And then, Robin, I just wanted to come back as a follow-up to Ryan's question on the cost of insurance charges. So I just want to make sure I understood it. So a billion three was the ultimate benefit you got from the repricing on that block you were referencing, and you said you expected to give half of it back. So have we seen cumulative CLI litigation charges of 600 million or something like that related to 2016? Repricing of the COI like and has all of that already hit, or can you just provide a little bit of clarity for, You know, the two pieces thing? Sure, yes. So when we made

Speaker Change: You said you expect you gave half of it back.

Speaker Change: Have we seen cumulative.

Speaker Change: Litigation charges of $6 $600 million or something like that.

Speaker Change: Related to the 2016.

Speaker Change: The repricing of the COI like and it has all of that already hit or can you can you just provide a little bit of clarity for.

Speaker Change: The two pieces thanks.

Robin Matthew Raju: Sure, yes. So when we made the increase in 2016, the total value, the PV value of the increase at that time, was $1.3 million. Over the last few years, we've accrued what we expect to give back, and in total, it's been roughly $600 million, of which $106 million was in the first quarter. We do not expect any further accruals related to this matter, and we don't see any impact going forward, guys.

Speaker Change: Sure, Yes, so when we made the increase in 2016, the total value of the PV value of increase at that time was $1 3 billion over the last few years, we've accrued for what we expect to get back and in total it's been roughly $600 million of which $106 million.

Robin Matthew Raju: Alright, 106 million was in the first quarter, we do not expect any further accruals related to this matter and we don't see any impact to go forward guidance.

Speaker Change: Okay. Thank you.

Dennis: Your next question is from the line of Joel Hurwitz with Dowling and Partners. Please go ahead.

Robin Matthew Raju: Your next question is from the line of Joel Hurwitz with Dowling and partners. Please go ahead.

Joel Hurwitz: Hey, hey, good morning. I wanted to follow up on the group, despite some of the general account flow pressure that was discussed earlier, the net interest margin was up pretty significantly year over year and even quarter over quarter. Can you give any color on the sizable improvement and spread there? And do you see that it's sustainable moving forward?

Joel Hurwitz: Hey, good morning, I wanted to follow up on group. Despite some of the general account flow pressure that was discussed earlier.

Joel Hurwitz: Net interest margin was up pretty significantly year over year, and even quarter over quarter.

Joel Hurwitz: Any color on on the sizable improvement in spreads there and do you see that as sustainable moving forward.

Robin Matthew Raju: Sure, so the group business for the quarter was $124 million in earnings, up 28% year-over-year. And in response to Nick's comments earlier, I mean, we see great operating leverage in this business, strong growth in equity markets, and we're retaining those fees to the bottom line.

Speaker Change: Sure Citigroup business for the quarter was $124 million of earnings up 28% year over year I have to say to Nick's comments earlier I mean, we see great operating leverage in this business strong growth in equity markets and we're retaining that those fees to the bottom line. So we're very pleased with overall our earnings growth coming through into groups.

Joel Hurwitz: So we're very pleased with overall earnings growth coming through on the group side. We've seen good improvement in net investment income as well. Remember, a lot of the net investment income is allocated to the different segments, so it could fluctuate from quarter to quarter. But we do expect to continue to grow it through the capabilities of Alliance Bernstein. In the quarter as well, the group business benefited from favorable taxation. So of the $124 I mentioned, net of some of the alternative investments and the tax, probably $115 is a good number to think about for the group retirement business.

Joel Hurwitz: We've seen.

Joel Hurwitz: Good improvement in net investment income as well remember a lot of the net investment income is allocated to the different segments. So they could fluctuate from quarter to quarter, but we do expect to continue to grow that through the capabilities of alliance Bernstein in the quarter as well the group business benefited from favorable tax so the 124 I meant.

Joel Hurwitz: <unk> net.

Joel Hurwitz: Net of someday arson attacks, probably $1 15 is a good number to think about credit group retirement business.

Robin Matthew Raju: Okay, that's helpful. And then another follow-up on the BlackRock product. Any way you can dimension the initial April flows? And then, in terms of that business, what is the return profile of that business? And how does that compare to the other group retirement business that you have?

Speaker Change: Okay. That's helpful. And then another follow up on the Blackrock product any any way you can dimension. The initial April flows and then in terms of that business.

Onur Erzan: What is the return profile of that business and how does that compare to the other.

Joel Hurwitz: Other group retirement business that you have.

Joel Hurwitz: Sure, we're not going to get ahead of this load.

Robin Matthew Raju: Sure, we're not going to get ahead of the flows; we'll wait until the second quarter, but as Mark mentioned, we expect it to be accretive to the group retirement business going forward. In terms of returns, I would think of it similar to other spread products in the marketplace. When we, you know, you're going to see meaningful flows relative to the group retirement business, but over the long term, that's when we see the real potential of this in capturing the longer-term retirement demand in the U.S. market and serving that client need that Mark highlighted on the call.

Robin Matthew Raju: So we're not going to get ahead of the flows and we'll wait till the second quarter, but as Mark mentioned, we expect it to be accretive to the group retirement business.

Robin Matthew Raju: Going forward in terms of returns perspective, I would think of it similar to other spread products in the marketplace.

Joel Hurwitz: When we youre going to see meaningful flows relative to the group retirement business, but over the long term as and when we see the real potential of this and capturing the longer term retirement demand in the U S market and serving that client need that mark highlighted on the call. So we're really bullish about the opportunity don't want to get ahead of it don't see it.

Robin Matthew Raju: So we're really bullish about the opportunity, don't want to get ahead of it, don't see it impacting cash earnings in the near term, but you start to see it come through in that flow. Great. Thanks, Robin.

Robin Matthew Raju: <unk> cash earnings in the near term, but youll start to see it come through in net flows.

Robin Matthew Raju: Yes.

Speaker Change: Great. Thanks Robyn.

Dennis: Your next question is from the line of Wilma Burdis with Raymond James. Please go ahead. Hey, good morning. Could you talk a little bit about the valuation and availability of potential wealth management scale deals?

Speaker Change: Your next question is from the line of Wilma Burtis with Raymond James. Please go ahead.

Wilma Carter Jackson Burdis: Hey, good morning could you talk a little bit about the evaluation and availability of potential wealth management scale deals.

Wilma Carter Jackson Burdis: Thank you.

Wilma Carter Jackson Burdis: Yeah, we're always looking at M&A opportunities in the US market and international specifically, we're focused on the wealth side and alternatives as we look at deals, but valuations continue to be high in the market, and we don't necessarily see them being accretive to shareholders relative to share buybacks at this time. That being said, we're pretty active, and you see that in the numbers on headcount up year over year on experienced hires. That's where we're thinking it's smart to deploy. We're bringing on experienced hires that have good AUM leverage to them.

Speaker Change: Yes, we.

Wilma Carter Jackson Burdis: Look at.

Wilma Carter Jackson Burdis: M&A opportunities in the U S market.

Speaker Change: In international specifically on we're focused on the wealth side and alternatives.

Mark Pearson: And as we look at deals, but valuations continue to be high in the market and we don't necessarily see.

Wilma Carter Jackson Burdis: We don't necessarily see it being accretive to shareholders relative to share buybacks. At this time that being said, we are pretty active and you see that in the numbers on head count up year over year on an experienced hires thats, where we think it's smart to deploy we're bringing on experienced hires that have good AUM leverage to them. So that's where we'll concentrate in.

Robin Matthew Raju: So that's where we'll concentrate in the near term. And remember, just, I just want to keep in mind when we get questions about M&A, like with the growth that we see coming through in the individual business, the group business through BlackRock, and the ALTS business of Lions Bernstein, you know, M&A isn't something that we need in order to deliver our targets. Our organic growth plan has performed tremendously, and you know, M&A will continue to be an option, but it's just an option because we're getting such good growth. That's where we'll prioritize our time. It's just a little bit more color on the outlook for alternative investment returns in 2Q and then, you know, the expectation for them to normalize a little bit. Thank you.

Robin Matthew Raju: The near term and remember just hey, I just wanted to keep in mind, when we get questions about M&A like with the growth that we see coming through in the individual business the group business through Blackrock and the Alts business Alliance Bernstein.

Robin Matthew Raju: M&A is something that we need in order to deliver our targets. Our organic growth plan has performed tremendously and M&A will continue to be an option, but it's just an option because we're getting such good growth, that's where we're prioritize our time.

Robin Matthew Raju: Thank you and just give a little bit more color on the outlook for alternative investment returns.

Robin Matthew Raju: <unk> <unk> and then.

Robin Matthew Raju: Vacation for them to normalize a little bit later in 'twenty four thank you.

Robin Matthew Raju: So, ALTS returned 5.8% on an annualized basis in the first quarter, and we expect similar returns in the second quarter. You know, the caveat being real estate equity, that's been under some pressure due to rates increasing. For the full year, we still expect to be slightly below our 8 to 12% target, you know, as long as equity markets maintain at these levels, as growth funds will continue to outperform relative to real estate equity. We're quite comfortable with the asset class, you know, over the long term. It's returned 10% on an annualized basis, so it's in the 8 to 12% long-term guidance that we've given.

Speaker Change: Sure so all.

Robin Matthew Raju: We returned five 8% on an annualized basis in the first quarter, we expect similar returns in the second quarter.

Robin Matthew Raju: Caveat being real estate equity that's been under some pressure due to rates and increasing further.

Robin Matthew Raju: For the full year, we still expect to be slightly below our 8% to 12% as long as equity markets maintain at these levels as the growth funds will continue to outperform relative to their real estate equity. So we.

Robin Matthew Raju: We are quite comfortable with the asset class over the long term, it's returned 10% on an annualized basis. So it's in the 8% to 12% long term guidance that we've given.

Speaker Change: Okay. Thank you.

Dennis: Your next question is from the line of Bob Huang with Morgan Stanley. Please go ahead. Hey.

Robin Matthew Raju: Your next question is from the line of Bob Wang with Morgan Stanley. Please go ahead.

Bob Huang: Hey, good morning. So maybe my first question is on group retirement. The result was probably the strongest since the first quarter of 2022. Obviously, that's driven by NII, higher fee income, and things of that nature. Just given the broader flow picture, broader macro environment, how durable do you think that earnings power is? And how should we think about just the earnings trajectory longer term going forward for that space?

Jian Huang: Hey, good morning.

Bob Huang: So maybe my first question is on group retirement the results was.

Bob Huang: Our strongest defense.

Bob Huang: First quarter 2022.

Robin Raju: Obviously, that's driven by NII higher fee income and things of that nature, just given the broader flow picture broader macro environment. How durable do you think that earnings power is and how should we think about just the earnings trajectory longer term going forward for that space.

Robin Matthew Raju: Look, as I mentioned earlier, the flow is, as Nick highlighted, we're seeing good growth in terms of first-year premium. We saw slightly higher surrenders, but we're retaining, you know, almost 50 percent of it through equitable advisors. The growth in earnings is sustainable. You know, we've seen it across time.

Speaker Change: Hello, guys I mentioned earlier.

Elyse Beth Greenspan: The flows that.

Robin Matthew Raju: We're seeing good growth in terms of first year premium we saw slightly higher surrenders, but we're retaining.

Robin Matthew Raju: With 50% of it through <unk> advisors.

Onur Erzan: The growth in earnings is sustainable.

Robin Matthew Raju: We've seen it across time as I mentioned, we have good operating leverage in that business.

Robin Matthew Raju: As I mentioned, we have good operating leverage in that business. You know, we're up 28 percent year-over-year, and if equity markets continue and we continue to invest in higher yields and deliver good risk-adjusted returns, we'll continue to see growth in earnings. And then, on top of that, over time, as the BlackRock LifePath product becomes more material, there's upside there as well.

Robin Matthew Raju: 28% year over year, and if equity markets continue and we continue to invest in higher yields and deliver good risk adjusted returns. We will continue to see growth in earnings and then on top of that over time as the Blackrock lightpath product becomes more material upside there as well.

Bob Huang: My follow-up is on the DOL rule. I know that you talked about earlier that you already operate under Reg B.I. standards, but I'm curious if the fiduciary rules would have an impact on sales for proprietary Alliance Bernstein products that are sold on the equitable distribution channel, or is there any impact between the Alliance Bernstein side of things as well?

Bob Huang: Great. Thank you.

Speaker Change: Great. Thank you my follow up is on a D O L rule.

Bob Huang: I know that you had talked about earlier that youre already under operate under <unk> standards, but curious if the fiduciary rules would have an impact on sales for proprietary alliance Bernstein products that are sold on the equitable distribution channel or are there any impact between the alliance Bernstein side of things as well.

Onur Erzan: Onur can jump in there, but the answer is no. Okay, no, thank you.

Speaker Change: Or I can jump in there, but the answer is no.

Onur Erzan: Okay. Thank you.

Nicholas Burritt Lane: Yeah, hey, great, Nick. Onur, just to validate based on our initial assessment, we don't see any material change in the business trajectory based on the DOL ruling tomorrow versus yesterday.

Onur Erzan: Yeah, Hey, great Nick Molnar, just to validate based on our initial assessment, we don't see any material change in the.

Onur Erzan: Our business trajectory based on the <unk> ruling tomorrow versus yesterday.

Onur Erzan: Excellent. Thanks.

Dennis: Your next question is from the line of Mark Hughes with Truist Securities. Please go ahead.

Nicholas Burritt Lane: Your next question is from the line of Mark Hughes with <unk> Securities. Please go ahead.

Mark Douglas Hughes: Yeah, thanks. Good morning.

Mark Douglas Hughes: Yes, thanks, good morning.

Mark Douglas Hughes: In the legacy business, the assets, the account value is actually up a little bit. Earnings were down. Is that the relationship, or should we just continue to see the earnings that tapered kind of regardless of what happens in terms of account value? What's the relationship?

Speaker Change: In the legacy business.

Mark Douglas Hughes: Asset values actually up a little bit.

Mark Douglas Hughes: Earnings were down.

Mark Douglas Hughes: Is that relationship should we just continue to see the earnings the taper.

Mark Douglas Hughes: Regardless of what happens in terms of account value what's the relationship there.

Robin Matthew Raju: Sure, so the legacy business, you know, continues to run off. You saw our outflows in the quarter of $659 million. That's in line with our $2.3 billion per annum guidance, so that's going to continue to run off. It'll be less than 5% of earnings by 2027, so pretty immaterial, despite, you know, strong cash flows as it's well-reserved. In the quarters, you're going to see it benefit from higher equity markets that'll help account for value, and we'll get more fee income.

Speaker Change: Sure. She had a legacy business continues to run off.

Robin Matthew Raju: You saw outflows in the quarter at 65 and $659 million. That's in line with our $2 3 billion per annum guidance thats going to continue to run off.

Robin Matthew Raju: It'll be less than 5% of earnings by 2027, so pretty immaterial.

Robin Matthew Raju: Despite.

Robin Matthew Raju: Strong cash flows as it's well reserved.

Robin Matthew Raju: In the quarter, then you're going to see a benefit from higher equity markets that'll help account value and we will get more fee income, but continue to expect it to run off under normal course.

Speaker Change: Thank you for that and then in.

Mark Douglas Hughes: And then the in-plan growth. The, What sort of allocation are you? Or do you anticipate for these plans is the idea that there's kind of some level of allocation early on, and then the real opportunity emerges when, perhaps, those folks go into de-accumulation mode, as you say, and they need to shift to maybe more annuity-type products. Is that the way to think about it, that you're kind of getting an option?

Mark Douglas Hughes: In plan growth.

Mark Douglas Hughes: The.

Mark Douglas Hughes: Yeah.

Mark Douglas Hughes: What sort of allocation are you.

Mark Douglas Hughes: Or do you anticipate to these plans.

Speaker Change: Yeah that there's kind of a.

Mark Douglas Hughes: Some level of allocation early on and then the real opportunity emerges when.

Mark Douglas Hughes: Perhaps those folks go into see accumulation mode, as you say and maybe the shift to.

Mark Douglas Hughes: Keeping more annuity type products is that the way to think about it that you're kind of yes. This is Nick giving and let me give you a little bit of color.

Nicholas Burritt Lane: Yeah. This is Nick. Let me give you a little bit of color on... Yeah. This is Nick.

Nicholas Burritt Lane: Yes. This is Nick let me give you a little bit of color on that first so to start the broader 401, K markets of southern trillion market of which roughly $3 trillion is.

Nicholas Burritt Lane: Let me give you a little bit of color on that. First, I'd start with the broader 401k markets, the $7 trillion market, of which, Allocated towards target date funds the way a bees product and the life Paycheck product work is that there's an allocation as consumers towards annuities and guaranteed income as consumers get closer to retirement. So specifically, in the life path paycheck. When a consumer starts or a participant turns 55, they would be allocated roughly 10% within annuities, and that would build towards age 65.

Nicholas Burritt Lane: Allocated towards target date funds the way ABS product.

Nicholas Burritt Lane: The life.

Nicholas Burritt Lane: Paycheck product work is there's an allocation as consumers towards annuities and guaranteed income as consumers get closer to retirement, so specifically in the light pass paycheck.

Nicholas Burritt Lane: When a consumer starts.

Nicholas Burritt Lane: We are a participant in terms 55, they would be allocated roughly 10%.

Nicholas Burritt Lane: Within annuities and that would build towards age 65, so the opportunity is both managing those assets.

Nicholas Burritt Lane: So the opportunity is both managing those assets and the fees off of that, and if they annuitize, then the economics would link to an annuity payout. So that's how I would think about this as an asset class within a target date portfolio. The close will come.

Nicholas Burritt Lane: Fees off of that and if they are <unk> then the economics would lend to an annuity payout. So that's how I would think about this as an asset class within a target date portfolio.

Nicholas Burritt Lane: Okay.

Mark Douglas Hughes: The flows will come both from the remapping, so that's why it comes in lumpy; we saw that two years ago with AB receiving a case, as the plan converts, and then they will consistently grow over time.

Nicholas Burritt Lane: The inflows will come both on the re mapping. So that's why it comes in lumpy, we saw that two years ago with ABB receive any case.

Mark Douglas Hughes: Planned converts and then they will consistently grow over time.

Speaker Change: I appreciate that.

Dennis: Your next question is from the line of Mike Ward with Citi. Please go ahead.

Mark Douglas Hughes: Your next question is from the line of Mike Ward with Citi. Please go ahead.

Michael Augustus Ward: Thank you. Good morning.

Michael Augustus Ward: Thank you and good morning.

Michael Augustus Ward: On the life pass opportunity with Blackrock, just wondering if that has any like exclusivity.

Michael Augustus Ward: Or could you potentially over time.

Michael Augustus Ward: We receive interest or do similar contracts our partnerships with.

Michael Augustus Ward: Although kind of retirement funds.

Michael Augustus Ward: On the life path opportunity with BlackRock, just wondering if that has any like exclusivity in it? Or could you potentially, over time, receive interest or do similar contracts? Our partnerships with other kinds of retirement funds.

Michael Augustus Ward: Yes, we're not going to comment on the specific relationship with Blackrock on the life of that product, we're happy to help with them help them develop the product and have another partner on there.

Robin Matthew Raju: Yeah, we're not going to comment on the specific relationship with BlackRock on the LightPath product, but we're happy to help with them, help them develop the product and have another partner on there as well. In addition, reminder, we have partnerships with Alliance Bernstein, who was first in the market 10 years ago. So we're quite pleased with that, and we'll continue to work with others on different types of offerings to serve this need for retirement income for US retirees.

Robin Matthew Raju: As well. In addition reminder, we have partnerships with alliance Bernstein.

Robin Matthew Raju: First in the market 10 years ago. So we're quite pleased with that and we will continue to work with others on different types of offerings to serve this need for retirement income for U S. Retirees.

Michael Augustus Ward: Okay. And then just the group insurance business and protection. I was wondering how you guys think about investing in the growth of that business or how you think about that business strategically?

Robin Matthew Raju: Okay.

Michael Augustus Ward: And then just.

Michael Augustus Ward: Group insurance business and protection wondering how you how you guys think about investing in the growth of that business or how you're thinking about that business strategically.

Robin Matthew Raju: Well, we're actively investing in that business. It's in the protection segment.

Michael Augustus Ward: Well, we're actively investing in that business.

Robin Matthew Raju: In the protection segment at this point in time I'll, let Nick highlight on some of the growth numbers that we're seeing come across and we expect it to breakeven.

Robin Matthew Raju: Breakeven soon so we continue to see good prospects next two I'll highlight some of the growth numbers I would say within our employee benefits line word disruptor.

Robin Matthew Raju: At this point in time, I'll let Nick highlight some of the growth numbers that we're seeing come across, and we expect it to break even, break even soon. So we continue to see good prospects. Nick, if you want to highlight some of the growth numbers. Yeah, I would say within our employee benefits line, we're a disruptor.

Nicholas Burritt Lane: Yeah, I would say within our employee benefits line, we're a disruptor relative to our new technology and our positioning is powerfully simple. We continue to see strong growth there. First year gross premiums were up 16 percent. And then, as Robin alluded to, we expect to continue to grow this. And it'll have a break even in the not too distant future.

Nicholas Burritt Lane: Relative to our new technology, and our positioning is powerfully simple we continued to see strong growth there for sure.

Nicholas Burritt Lane: Gross premiums were up 16% and then as Robin alluded to.

Nicholas Burritt Lane: We expect to continue to grow this.

Nicholas Burritt Lane: It will have.

Nicholas Burritt Lane: Breakeven in the not too distant future.

Speaker Change: Okay. Thanks.

Dennis: There are no further questions. And with that, this concludes the Equitable Holdings first quarter 2024 earnings call. Thank you for joining us. You may now disconnect.

Speaker Change: There are no further questions and with that this concludes the equitable holdings first quarter 2024 earnings call. Thank you for joining you may now disconnect.

Speaker Change: Please wait the conference will begin shortly.

Dennis: [music].

Dennis: Okay.

Dennis: Okay.

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Dennis: Okay.

Dennis: Yes.

Dennis: Yes.

Dennis: Yes.

Dennis: Sure.

Dennis: Okay.

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