Q2 2025 Equitable Holdings Inc Earnings Call

In your press Star followed by the number one on your telephone keypad and if you would like to withdraw your question Press Star one again.

And please limit yourself to one question and one follow up.

I would now like to turn the call over to Eric bass head of Investor Relations. Please go ahead Eric.

Thank you good morning, and welcome to Equitable Holdings second quarter 2025 earnings call materials for today's call can be found on our website at IR Dot equitable holdings Dot 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 or.

Our results may differ materially from those expressed in or indicated by such forward looking statements.

Thank you for standing by and welcome to the Equitable Holdings Inc. Second quarter earnings call all lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session if you would like to ask a question.

Please refer to the Safe Harbor language on slide two of our presentation for additional information.

In the press star, followed by the number 1 on your telephone keypad. And if you would like to try your question, press star 1 again,

Joining me on today's call are Mark Pearson, President and Chief Executive Officer of Equitable Holdings, Robyn <unk>, Our Chief Financial Officer, Nick Wayne President of Equitable financial Tom Simeoni Alliance Bernstein, as Chief Financial Officer, and owner, Arizona Head of Alliance Bernstein Global client group and private.

Wealth business.

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 in our earnings release slide presentation and financial supplement I.

I will now turn the call over to Mark.

Good morning, and thank you for joining today's call. This quarter marks the halfway point of our five year planning period, and we're pleased with the organic growth momentum across our businesses and the progress we've made on our strategic initiatives.

In July we closed a landmark individual life reinsurance transaction with RGA, which feed over $2 billion of capital and we will significantly reduce future earnings volatility.

Looking forward we.

We're excited about the growth prospects across our retirement asset management and wealth management businesses.

And the flywheel benefits from our integrated business model position us well to be a long term winner in each of these markets.

Turning to slide three let me briefly cover our second quarter results.

non-GAAP operating earnings were $352 million or $1 10 per share down 23% year over year on a per share basis.

Adjusting for notable items non-GAAP operating EPS was $1 41.

Which is down 8% compared to the prior year.

But the primary driver of the decline was elevated individual life mortality claims.

In addition.

Fee based earnings were pressured by lower average equity market levels during the second quarter.

While our results this quarter came in below expectations, we see several positive leading indicators that suggest growth will accelerate in the second half of the year.

Our mortality exposure has been reduced by 75% and markets have had a strong recovery.

Assets under management and administration at quarter end totaled a record $1 one trillion.

Which is up 5% year to date, and bodes well for future growth and spread and fee based earnings.

We also see healthy organic growth momentum supported by our flywheel business model.

Our retirement businesses could used $1 9 billion of net inflows in the second quarter, driven by strong wireless sales and $250 million of Blackhawk life path paycheck net inflows.

Wealth management also had another very strong quarter with $2 billion of advisory net inflows and the trailing 12 months organic growth rate is 12%.

We continue to see positive advisor recruiting trends and productivity increased 8% year over year.

Turning to asset management.

Is not immune to the challenging market conditions in the second quarter and reported net outflows of $6 7 billion, which includes active net outflows of $4 8 billion.

The outflows were concentrated in April and the business returned to net inflow in June.

<unk> also continues to grow its private markets business with AUM up 20% year over year to $77 billion.

And the total institutional pipeline increased to $22 billion.

The highest level since 2022.

Moving to capital.

We returned $318 million to shareholders in the second quarter, which represents a 74% payout ratio above our 60% to 70% target.

We are on track for one six to $1 7 billion.

Although organic cash generation in 2025 with over 50% coming from our asset and wealth management businesses.

In addition, we expect to bring approximately $1 billion of additional insurance dividends to the holding company in the second half of 2025, following the close of the individual life reinsurance transaction.

As Robyn will discuss we plan to execute at least $500 million of incremental share repurchases and repay some debt before year end.

We have already received regulatory approval for these dividends.

Over the past few months, we have made significant progress executing against our strategic initiatives to reduce earnings volatility.

Improve our return on capital and drive future growth.

I've already highlighted the likely insurance transaction with RGA, which closed on July 31.

In addition in June we completed the first internal reinsurance transaction to our Bermuda entity as well as the majority of our policy innovation initiative.

These actions enhance our financial flexibility and visibility into future cash flows from our insurance entities.

Finally, youre seeing evidence of the flywheel synergies between equitable and AEP.

Good example is the <unk> side co investment.

Which yielded a $1 billion private credit investment management agreement with RGA, including mandates for newer strategies that have recently been ceded by equitable.

This has helped to accelerate momentum and <unk> insurance business, which has added four new insurance general account relationships year to date.

Turning to slide four.

Ill provide an update on performance against our three primary financial targets, which are to grow annual cash generation to $2 billion by 2027.

Deliver a 60% to 70% payout ratio and grow non-GAAP operating earnings per share, 12% to 15% annually.

As I mentioned, we are on track for one six to one $7 billion of organic cash generation in 2025, and we have a good line of sight into achieving our $2 billion target for 2027, even after ensuring 75% of.

Our in force individual life block.

Our cumulative payout ratio over the past 10 quarters is 68% at the upper end of our 60% to 70% target range. As a reminder, the $500 million of additional share repurchases. Following the individual life transaction is on top of this target.

The one metric, where we are slightly below plan as EPS growth.

As we have a 10 quarter average growth rate of 11% versus our 12% to 15% target.

Year to date.

non-GAAP operating EPS, excluding notable items is down 5% due to elevated mortality claims.

The reinsurance transaction had been effect starting January one.

And our mortality claims was reduced by 75% non-GAAP operating EPS growth would have been 3% in the first half of the year.

Looking forward, we expect EPS growth to accelerate given the recovering markets and benefit from incremental share repurchases.

Turning to slide five.

We highlight some of the key performance indicators for our business segments and the progress we've made against our Investor day targets.

I won't cover everything on this page, but want to call out a few items.

Starting with retirement.

We have delivered 5% organic growth year to date and 6% over the past 10 quarters.

This has helped drive a 13% annual growth in AUM significantly ahead of plan.

Not included in retirement net flows is our spread lending program.

We have issued $3 4 billion of <unk>.

Year to date and have approximately $9 billion outstanding.

We expect to be a consistent issuer going forward, which will contribute to growth in future spread income.

Turning to AEP, while active net flows are modestly negative year to date. The base fee rate has remained relatively stable and the business is on track for a 33% margin in 2025.

This is up 410 basis points since 2022 and reflects the benefits from <unk> office relocation strategy and the Bernstein Research JV.

We have made significant progress in scaling our wealth management and private markets businesses.

Wealth management has delivered a 12% organic growth rate over the trailing 12 months has grown.

To $110 billion and is on track to exceed $200 million of annual earnings ahead of schedule.

Private markets AUM has grown to 77 billion.

Up 20% over the past year, and we expect it to reach $90 billion to $100 billion.

By 2027.

Finally, we are seeding future growth by developing new markets for both AEP and equitable.

We continue to see in plan annuities as a growth market and we have a first mover advantage through our relationships with AB Blackhawk.

Blackhawk and J P. Morgan.

Since launching the Blackhawk life path paycheck product in the second quarter of 2024, we have received over $800 million of inflows.

We also expanded our institutional offering through a partnership with a leading HSA provider, which has yielded approximately $350 million of net inflows year to date.

<unk> is making good progress and target growth areas like active Etfs and insurance mandates, which now have AUM of $8 billion and 48 billion respectively.

Moving to slide six.

I want to reinforce the value created by our individual life reinsurance transaction and the benefits it will have for equitable moving forward.

By reinsurance, 75% of our enforce individual life block on a pro rata basis, we have significantly reduced our exposure to future mortality claims and the associated volatility.

This should enable us to deliver more predictable earnings.

We are also generating over $2 billion of value to a positive ceding Commission.

And the release of capital supporting the block.

This represents a multiple of approximately 20 times, our last earnings at very attractive valuation.

This freed capital will be redeployed into higher return businesses and drive accretion for shareholders.

We have already used $760 million to increase our ownership stake in <unk> from 62% to 69% and we plan to execute $500 million of incremental share repurchases in the second half of 2025.

We also expect to repay some debt.

This leaves us with some remaining capacity for opportunistic growth investments or additional buybacks.

I'm very excited about the road ahead for equitable and I will now turn the call over to Robin to go through our financial results in more detail.

Thanks, Marc turning to slide seven I will provide some more detail on our second quarter results.

This free Capital will be redeployed into higher return, businesses and drive accretion for shareholders.

On a consolidated basis non-GAAP operating earnings were $352 million or $1 10 per share.

And we reported a GAAP net loss of $349 million.

We had a few notable items in the quarter.

We have already used 760 million to increase our ownership. Stake in AB from 62% to 69% and we plan to execute 500 million of incremental share repurchases in the second half of 2025.

Our alternative investment portfolio returned six 3% in the quarter modestly below our 8% to 12% long term expectation, but in line with our guidance for the second quarter.

We also expect to repay some debt.

This leaves us with some remaining capacity for opportunistic, growth Investments or additional BuyBacks.

In protection solutions, we had $74 million after tax of negative one time items.

I'm very excited about the road ahead for Equitable, and I'll now turn the call over to Robin to go through our financial results in more detail.

Driven primarily by the discovery of a third party administrator issue that resulted in the late reporting of some coli claims work.

Thanks, Mark, turn in a slide 7. I will provide some more details on our second quarter results.

We are confident that all outstanding claims have now been identified and that there won't be any impact in future quarters. We also identified a few other small items that were cleaned up ahead of the closing of the RGA transaction.

On a Consolidated basis. Non-gaap operating earnings were 352 million or a $110 per share.

And we reported a gaap, net loss of 349 million.

We had a few notable items in the quarter.

Finally in corporate and other we had $16 million of notable items, primarily from one off expenses related to a true up of P cap issuance costs and an adjustment to the ADN currency hedges.

Our alternative Investment Portfolio returned 6.3%. In the quarter modestly, below our 8 to 12% long-term expectation, but in line with our guidance, for the second quarter,

After adjusting for these items non-GAAP operating earnings per share would have been $447 million or $1 41 per share.

Of -1 time items.

Total assets under management and administration rose, 8% year over year to one one trillion this bodes well for future earnings growth.

Driven primarily by the discovery of a third-party administrator issue that resulted in the late reporting of some COI claims.

Adjusted book value per share at OCI, and with our ownership stake at market value with $40 89.

We are confident that all outstanding claims have now been identified and that there won't be any impact in future quarters. We also identified a few other small items that were cleaned up ahead of the closing of the RGA transaction.

Up 11% year over year.

In our view the more meaningful number than reported book value per share acts aici, which reflect our holding at book value.

Finally, in corporate and other we had 16 million of notable items primarily from 1-off expenses related to a true-up of pcap issuance cost and an adjustment to the sabn currency hedges.

Our adjusted debt to capital ratio with <unk> ownership stake at market value with 23% in the quarter.

On slide eight I will provide some further details on our segment level earnings drivers.

After adjusting for these items. Non-gaap operating earnings per share would have been 447 million or a $1.41 per share.

Starting with mortality, we again experienced a higher than expected level of larger claims in our individual life insurance block primarily concentrated in older age policyholders.

Total assets under management and administration Rose 8% year-over-year to 1.1 trillion.

This goes well for future earnings growth.

Excluding the late reported claims that I mentioned previously mortality came in about $35 million after tax worse than our normal expectations.

adjusted book value per share X aoci and with our AB ownership stake at market value was $40.89 up 11% year-over-year

Moving to individual retirement earnings declined on a year over year basis, driven by a couple of factors that I would like to dive deeper into.

in our view, this is a more meaningful number than reported book, value per share X aoci which reflects our a holding at Book value,

Fee based revenues declined by 3%.

Our adjusted debt to Capital ratio with obbs ownership stake at market value was 23% in the quarter.

<unk> lower average separate account balances due to outflows in our older <unk> block and the equity market decline through April.

On slide 8, I'll provide some further details on our segment, level earnings drivers.

Fee based products account for about half of our segment earnings and have a higher return on assets and spread products.

Starting with mortality, we again experience a higher-than-expected level of larger claims in our individual life insurance block, primarily concentrated in older age policyholders.

Net interest margin, our NIM was flat year over year as strong growth in net investment income was offset by higher interest credited we.

We attribute the three dynamics.

Excluding the late reported COI claims that I mentioned previously, mortality came in about 35 million after tax worse than our normal expectations.

First we are starting to see more of our very profitable older Riley segments mature.

Moving to individual retirement earnings declined on a year-over-year basis, driven by a couple of factors that I'd like to dive deeper into.

These policies were written at a time when competition was eliminated.

And we can achieve margins well above our normal hurdle rates.

While we continue to earn attractive 15% IRR on new business. This is below the recurring return when we had the market largely to ourselves.

Feed-based revenues declined, by 3%, reflecting lower, average separate account balances. Do you do outflows in our older GMX B Block and the equity market decline through April.

Fee based products, account for about half of our segments earnings and have a higher return on assets than spread products.

Second a component of interest credited its market value adjustments or NDA.

Which are collected if a contract is early surrendered or the policyholders chain segment within their <unk> contract.

Net interest margin or Nim was flat year over year as strong growth in net investment. Income was offset by higher interest. Credited.

We attribute this to 3 Dynamics.

NBA <unk> had been quite stable from the second half of 2022 through the first half of 2024.

First, we are starting to see more of our very profitable older Riot segments, mature,

They have declined in recent periods and were essentially zero this quarter.

these policies were written at a time, when competition was limited,

And we could achieve margins. Well above our normal hurdle rate.

This reduced year over year NIM growth by about 10%.

We do not assume any benefit from NDA in pricing and expected limited GAAP, earning contribution moving forward.

While we continue to earn attractive, 15% IRS on new business. This is below the returns earned when we had the market largely to ourselves,

Third we have multiple product lines that drive individual retirement, NIM, including rylands and payout annuities as well as income from surplus.

Second, a component of Interest credited is market value, adjustments, or mbas.

This can create noise on a quarterly basis.

Which are collected. If a contract is early surrendered or the policy holders change segments within their RI of contract,

When we update our financial reporting next quarter, we plan to provide additional disclosure to help you model name across our retirement businesses.

Mbas had been quite stable from the second half of 2022, through the first half of 2024.

The final drag on earnings has been higher commission expense, which reflects strong sales volumes, particularly at equitable advisers, where not all payouts can be capitalized in DAC.

But they have declined in recent periods and were essentially zeroed this quarter.

This reduced year-over-year name growth by about 10%.

This is ultimately a positive as we will see higher earnings over time by new business does not immediately start to contribute to GAAP profits.

We do not assume any benefit from nva's, in pricing and expected. Limited Gap, earnings contribution, moving forward,

Looking forward, we view $220 million to $225 million as a good baseline for third quarter earnings for individual retirement, assuming normal markets and our current segment reporting methodology.

third. We have multiple product lines that drive individual retirement, Nim including riyas, and payout annuities as well as income from Surplus.

So this can create noise on a quarterly basis.

Keep in mind that not all of the benefit from the strong organic growth in individual retirement shows up within the segment earnings.

When we update our financial reporting next quarter, we plan to provide additional disclosure to help you model name across our retirement businesses.

Robust sales volumes benefited transactional revenues in wealth management and drive asset flows to AEP.

In addition growth in our general account assets allows us to expand our spread lending program, which generate earnings that currently get allocated across all of our insurance segments.

The final drag on earnings has been higher commission expense, which reflects strong sales volumes particularly at Equitable advisors, we're not all payouts can be capitalized in DAC.

This is ultimately a positive, as we'll see higher earnings over time, but new business does not immediately start to contribute to Gap profits.

Turning to group retirement earnings declined sequentially due to lower average separate account balances in the second quarter, but the market rebound should lift third quarter results.

And our current segment reporting methodology.

<unk> reported a solid quarter from an earnings perspective and remains on track to achieve a full year margin target of 33%.

Keep in mind that not all the benefit from the strong organic growth in individual retirement shows up within the segments earnings

AUM ended the second quarter at record levels, which should support growth in base fees.

<unk> now expects full year performance fees of $110 million to $130 million up from our prior forecast of $90 million to $105 million.

Robust sales volumes benefit transactional revenues and wealth management, and drive asset flows to AB.

Finally wealth management had a very strong quarter with earnings up 16% year over year.

In addition growth in our general account assets, allows us to expand our spread lending program, which generates earnings that currently get allocated across all of our insurance segments.

We expect this momentum to continue given robust net new asset growth and supportive equity markets.

Turning the group retirement earnings declined, sequentially due to lower average separate account. Balances in the second quarter, but the market rebound, should lift third quarter results.

Across our businesses, we expect earnings to improve in the second half of the year given record AUM levels higher investment portfolio yields benefits from expense action and reduce mortality exposure.

AB reported a solid quarter from an earnings perspective and remains on track to achieve its full year margin Target of 33%.

Turning to slide nine we executed on several important capital management initiatives during the quarter, which will support growth and enhanced visibility into future cash flows.

AUM ended, the second quarter at record levels, which should support growth in base fees.

And ab now expects full year performance fees of 110 to 130 million

Up from our prior forecast of 90 to 105 million.

As Mark previously discussed we are thrilled to have closed the life reinsurance transaction with RGA, which we expect will reduce earnings volatility and will enhance returns on capital and be accretive to earnings and cash flow per share.

Finally wealth management had a very strong quarter with earnings up 16% year-over-year.

We expect this momentum to continue given robust, net, new asset growth and supportive Equity markets.

In June we also completed the first transaction with our Bermuda entity.

Our reinsurance approximately $30 billion of group annuity contracts.

While this transaction does not impact our view of excess capital it enhances our visibility of future cash generation and our ability to upstream excess surplus on a consistent basis.

Across our businesses, we expect earnings to improve in the second half of the Year given record AUM levels. Higher Investment Portfolio. Yields benefits from expense actions and reduce mortality exposure.

Turning to slide 9, we executed on several important Capital Management initiatives during the quarter which will support growth and enhance visibility into future cash flows.

This is because of a better alignment between the Bermuda framework and how we economically hedge our annuity book.

As Mark previously, discussed, we are thrilled to have closed the life, reinsurance transaction with RGA.

Looking ahead, having in Bermuda entity provide another tool in our capital management toolkit, and we will be opportunistic in utilizing at this.

Which we expect will reduce earnings volatilities and will enhance Returns on Capital and be accretive to earnings and cash flow per share.

This could include feeding additional blocks of in force business.

In June, we also completed the first transaction with our Bermuda entity.

<unk>, new business on a flow basis, or even reinsurance third party business.

Reinsurance approximately 30 billion of group annuity contracts.

Finally, we've completed the first wave of policy innovations.

Moving a portion of our reinsured legacy VA policy to Venerable and a portion of internally reinsured policies from New York, Arizona Bye.

While this transaction does not impact our view of excess capital, it enhances our visibility into future cash generation and our ability to upstream excess surplus on a consistent basis.

By no waiting these policies, we reduce counterparty risk.

Fire statutory accounting and increase future financial flexibility.

this is because of a better alignment between the Bermuda framer and how we economically hedge our annuity book

These strategic initiatives support Equitable's consistent capital management program, which is highlighted on slide 10.

Looking ahead having a Bermuda, entity provides another tool in our Capital Management toolkit and we'll be opportunistic and utilizing it.

During the quarter, we returned $318 million to shareholders, including $236 million of share repurchases.

this could include seating additional blocks of enforce business, seating new business, on a flow basis, or even reinsurance, third party business,

The payout ratio was 74% of earnings excluding notable items in the quarter above our 60% to 70% guidance range.

Finally, we've completed the first wave of policy Innovations.

Over the past year, we have reduced our share count by approximately 6%, helping us drive growth in earnings per share.

Moving a portion of our reinsured Legacy VA policies to venerable and a portion of internally reinsured policies from New York to Arizona.

We currently have about $800 million of cash at the holding company above our $500 million minimum target.

By know, these policies, we reduce counterparty risk. Simplify our statutory accounting and increase future Financial flexibility.

During the quarter, we spent approximately $760 million to purchase additional units and $283 million to retire our standing series B preferred stock.

These strategic initiatives support Equitable consistent, Capital Management program, which is highlighted on slide 10.

During the second half of the year, we expect to upstream one 7 billion of excess surplus from our insurance subsidiary to the holding company.

During the quarter, we returned 318 million to shareholders, including 236 million of share repurchases.

Which include both organic cash generation and a portion of proceeds from the life reinsurance transaction.

The payout ratio was 74% of earnings, excluding notable items in the quarter above our 60, to 70%, guidance range.

We have received regulatory approval for any required extraordinary dividends.

over the past year, we have reduced our share count by approximately 6%, helping us drive growth in earnings per share,

Following the life reinsurance transaction and these planned dividends.

We currently have about 800 million of cash at the holding company above our 500 million minimum Target.

We will have a pro forma combined <unk> RBC ratio of over 500% above our 400% minimum target.

It puts the enterprise in a strong capital position and provide capacity to fund growth and meet our payout ratio targets, even during periods of market volatility.

During the quarter, we spent approximately 760 million to purchase additional AB units and 283 million to retire, power standing series, B preferred stock.

During the second half of the year, we expect to Upstream 1.7 billion of excess Surplus from our insurance subsidiaries to the holding company.

We plan to execute at least $500 million of incremental share repurchases in the second half of 2025.

Which include both organic cash generation and a portion of proceeds from the life. Reinsurance transaction.

And we will also look to pay down some outstanding debt and manage our leverage ratio and maintain flexibility.

We have received regulatory approval for any required extraordinary dividends.

We will be opportunistic in redeploying the remaining transaction proceeds in a timely manner to support growth and drive shareholder value.

Action and these planned dividends.

Now, let me turn the call back over to Mark Mark.

We will have a proforma combined Nic RBC ratio of over 500% above our 400% minimum Target.

Thanks Robin.

Looking forward <unk>.

<unk> is well positioned to capitalize on the growth opportunities across retirement asset management and wealth management helped by the flywheel benefits of our integrated business model.

this puts the Enterprise in a strong Capital position and provides capacity to fund growth and meet our payout ratio targets even during periods of Market volatility,

We have strong organic growth momentum and the individual life reinsurance transaction will reduce earnings volatility that has weighed on our year to date results.

We plan to execute at least 500 million of incremental share repurchases in the second half of 2025.

We also have a robust balance sheet and significant feed capital to redeploy which will be accretive to earnings per share.

And we will also look to pay down some outstanding debt to manage our leverage ratio and maintain flexibility.

As a result, we expect EPS growth to accelerate in the second half of 2025, and we remain confident about achieving our 2027 financial targets.

We will be opportunistic in redeploying the remaining transaction proceeds in a timely manner to support growth and drive shareholder value.

Now, let me turn the call back over to Mark, Mark.

We will now open the line for your questions.

We will now begin the question and answer session. If you would like to ask the questions into press star followed by the number one on your telephone keypad and again, please limit yourself to one question and one follow up.

Thanks Robyn. Looking forward. Equitable is, well, positioned to capitalize on the growth opportunities across retirement, asset management. And wealth management helped by the flywheel benefits of our integrated business model.

We have strong organic growth momentum and the individual life. Reinsurance transaction will reduce the earnings volatility that has weighed on our year-to-date results.

And your first question comes from the line of Ryan Krueger with Ww Ryan. Please go ahead.

Alright, good morning.

We also have a robust balance sheet and significant freed capital to redeploy, which will be accretive to earnings per share.

Robyn Thank you for the for more color on the earnings and individual retirement I guess the question is you gave us the baseline earnings for the third quarter, but how should we think about the growth in earnings beyond that.

As a result, we expect EPS growth to accelerate in the second half of 2025. And we remain confident about achieving our 2027 Financial targets.

I guess you do have good growth momentum.

We will now open the line for your questions.

In the business, but it does seem like.

The earnings I assume will continue to grow less than.

Account values just given the dynamics you mentioned, Tom run off of higher margin legacy Wright business.

We will now begin the question and answer session. If you would like to ask a question simply press star, followed by the number 1 on your telephone keypad. And again, please limit yourself to 1 question and 1 follow-up.

As well as some of the mix shift between variable annuities and rigor. So I don't know if you can give us any more context, but just trying to think about.

And your first question comes from the line of Brian Krueger with KBW Ryan. Please go ahead.

Growth off of that third quarter starting point.

Okay, Ryan let me just break it down in a few components what happened now in this current quarter and then how should we think about it going forward. So we view approximately 220 to $2 25 is a reasonable baseline for the third quarter. As you noted and I noted on the call results came in lower from the few components one fee based products.

And our historical floating rate VA, which is more linked to the separate account markets were lower in April, which which was below our expectations, which is about 2% and 2% for quarter, but that should help us going forward. So that's going to support the $2 20 to 225 guidance that I gave given the equity market rebound.

Robin, thank you for the, um, for the more color on the earnings in individual retirement. I guess the question is you gave us the the Baseline, earnings for the third quarter, but how should we think about the growth in earnings beyond that? Um, you know, I guess you do have you have good good growth momentum in, uh, in the business. But it does seem like, um, you know, the the earnings I assume will continue to grow less than than account value just given the D.

Reported NIM was flat year over year as strong load growth in net investment income was offset by interest credited as we've talked about previously a big piece of that is market value adjustments. These bounce around quarter to quarter, it's been about $10 million pre tax recently, but with zero. This quarter. So that obviously has an impact.

Dynamic. You mentioned on runoff of higher margin Legacy Riya business as, as well as some of the mixed shifts between variable nodes and Riya. So I don't know if you can give us any more context, but just trying to think about um, for the growth off of that third quarter starting point.

<unk>, we don't predict much of that going forward, but that could sway results on the positive side, if that bounces back as.

Well our view NIM spreads.

Have somewhat stabilized and we will continue to stabilize this year as we see the runoff from our very profitable book when we owned the market to ourselves where margins are more stabilized at a 15% IRR. So you can assume that to flatten out this year and probably for the next nine to 12 months, we're going to see that shift so the NIM right.

Okay, Ryan. Yeah, let me just break break it down in a few components, what happened now in this current quarter and then how should we think about it, going forward. So we view approximately 220 to 225 as a reasonable Baseline. For the third quarter, as you noted and I noted on the call results came in lower. From the few components 1 seabase products in our historical, loading rate VA, which is more linked to the separate account markets, were lower in April which, um, which was below our expectations, which is about 2% in the 2% for a quarter, but that should help us going forward. So that's going to support the 220 to 225 guidance, that I gave given the equity Market rebound.

It should be consistent going forward, but the business momentum remains strong as we mentioned in the call and going forward, we do expect to general account to grow which benefits the other parts of our flywheel, including AUM.

Wealth management fee and then also our spread lending capability, which will all benefit us going forward.

Just one related follow up.

Reported Nim was flat year-over-year, um, as strong. Go growth in net investment income was offset by interest credited. As we talked about previously, a big piece of that is market value adjustments. These Bounce Around quarter to quarter, it's been about 10 million pre-tax recently, but with zero this quarter So that obviously, um, has an impact, we don't predict much of that going forward but that could sway results on the positive side. If that bounces back uh as well, I would view Nim spreads, um, have somewhat stabilized and

I don't know if you have to do something approximate.

Exact but how.

How much of your in force right would you say is more.

The older business, when you had excess returns compared to.

That's probably more in line with your pricing targets now.

Yes, it's about to the in force and I would put that pre 2020, it's about 15% of the total account value and Thats.

Very good very high margins, because we are the only ones in the market at that time, so as more people have come in those margins have stabilized, but so it's not a huge shift that's why we think over the next.

Continue to stabilize this year as we see the runoff from our very profitable book when we owned the market, um, to ourselves where margins are more stabilized at a 15% IRR. So you can assume that to flatten out this year and, you know, probably for the next 9 to 12 months, we're going to see that shift. So the NIM rate should be consistent um going forward. But the business momentum remains strong, as we mentioned in the call. Going forward, we do expect the general account to grow, which benefits the other parts of our flywheel, including AUM, wealth management fees, and then also our spread lending capability, which will all benefit us going forward.

Over the next few quarters that should stabilize as that will come off.

And your next question comes from the line of soon it come up with.

Jefferies.

Please go ahead.

Great. Thanks, Robert I wanted to come back to the spreads in IR. It sounds like youre, saying that that should sort of stabilize or flatten out here is there any sensitivity to that outlook, if the fed starts or if and when the fed starts cutting rates.

I don't know if you have if you have something approximate not looking for anything exact but how how much of your enforce rival? Would you say is is more of the the older business when you had, you know, access returns compared to. It's just that's probably more in line with your pricing targets. Now

Yes.

It's not for a variety of products, specifically Sydney if not.

Only the short term rates, it's really looking at I would say closer something to the 10 year.

Treasury and then also were looking at volatility and we're looking at corporate spreads. So those are the three drivers of <unk> profitability, which we used to price products. So we're matching our pricing depending on the movement to that 15% IRR. So we're less sensitive to those movements are more focused on making sure our pricing.

Yeah, it's about. So the Imports and I would put that like pre-2020, it's about 15% of the total account value and that's, you know, very good, very high margins. Because we were the only ones in the Market at that time. So as more people have come in, those margins have stabilized but so it's not a huge shift. That's why we think, you know, over the next you know. Um oh the next few quarters that should stabilize is, that'll come off.

And your next question comes from the line of soon. It come up with J for is soon. Please go ahead.

Meet that hurdle rate.

Okay that makes sense, and then I guess sticking with IR and <unk>.

How do the economics of the products that you sell through the wealth management business compare to the products that you sell through third parties and I'm, assuming it's sort of a level Commission.

Great. Thanks. Um, Robin. I I want to come back to the spreads in IR. It sounds like you're saying that that should sort of stabilize or flattened out here is, is there any sensitivity to that Outlook If the Fed starts or if, and when the FED starts cutting rates?

So thats not the difference, but theres probably other factors that we should think about in terms of the profitability can you just kind of talk about that.

Look I mean, we're perfect I'll ask Nick to jump in and talk about the growth that we're seeing.

No, uh, because um, it's not a for Riola product specifically. Um, so you need, it's not um, only the short-term rates. It's really looking at, I would say close or something to the 10-year Treasury, and then also we're looking at volatility and we're looking at corporate spread. So those are the three drivers of our RY of profitability, which we use to um, price.

Within that segment, but within our wealth management franchise.

Where we're closer to the client and we see better persistency and we do see higher margins as a result of that when we sell any of our products through our wealth management business, that's why owning and having an affiliated distribution is a differentiator for our met for equitable and a key part of our flywheel going forward, Nick do you want to add on.

Products. Um so we're matching our pricing dependent on the movements to that, 15% irr. So we're less sensitive to those movements and more um focused on making sure our pricing meets that her rate.

Some of the growth, we're seeing on the wealth management side.

Sure as Mark and Robyn highlighted equitable wireless sales were up 9% year over year. This was another record high with a total of one 7 billion of net flows.

Okay, that makes sense. And then I guess um sticking with uh ir and Riya how do the economics of the products that you sell through the wealth management business compared to the products that you sell through third parties. I'm assuming it's sort of a level commission. Um, so that's not the difference. But there's probably other factors that we should think about in terms of the profitability. Can you just kind of talk about that?

We continue to believe that to be a sustainable success story, you need to generate attractive yields have distribution, which generates lower cost liabilities. This is both equitable advisers and third party partners that have a more curated share of.

Products on the shelf and scale and we think equitable has that flywheel benefit. So we're a sustainable success story of the business.

Well, go ahead and we'll perfect. I'll ask Nick to jump in and talk about the growth that we're seeing um, within that segment but within our wealth management franchise. Um, those are where we're closer to the client, um, and we see better persistency and we do see higher margins. Um, as a result of that, um, when we sell any of our products, through our wealth management business, that's why owning, and having Affiliated distribution, is a differentiated from for Equitable and a key part uh of our flywheel going forward and Nick, do you want to add on some of the growth we're seeing on the wealth management side?

And your next question comes from the line of Tom Gallagher with Evercore ISI. Please go ahead.

Good morning.

Question on capital management, and what Youre thinking there I guess after your extraordinary dividends, you're still going to have.

Uh, sure. Um, as Mark and Robin, uh, highlighted Equitable Risa sales were up 9% year-over-year. This was another record high with a total of 1.7 billion of net flows. Uh, we continue to believe that to be a sustainable success story. You need to generate

500% pro forma RBC.

With the baseline plan b to take out another extraordinary dividend next year.

On.

So you would end up doing.

More buybacks in 2026 than you would normally generate.

It sounds like Youre going to do some debt paydown as well.

Active yields have distribution, which generates lower costs liabilities. This is both Equitable advisors and third-party partners that have a more curated share of, uh, products on the shelf and scale and we think Equitable has that flywheel benefit. So we're a sustainable success story in the business.

But how are you thinking about kind of the cadence of getting.

Some of this excess capital out from the RGA deal.

And your next question comes from the line of farm Gallagher with evercore isi thumb. Please go ahead.

All of that billion that I guess wasn't deployed into an increased <unk> stake.

<unk> Park with the vast majority of that likely go into buyback today are you still deciding between debt Paydown and.

Good morning. Um question on Capital Management and what you're thinking there, I guess. After your extraordinary dividends, you're still going to have

And share repurchase thanks.

500% proforma, RBC with, with the Baseline Plan, B to take out another extraordinary dividend next year.

Thanks, Tom I think you had a few questions.

um,

<unk>.

On on on. So you would end up doing

All good questions.

We're thrilled as I said on the call to close this RGA transaction.

More importantly, the strategic value of this transaction.

Really cements us in today's flywheel of asset retirement, and wealth management and also recognizing we're not a differentiator in owning mortality.

more Buybacks in 2026 than you would normally generate. Um, it sounds like you're going to do some Debt Pay down as well. Um, but how are you thinking about kind of the Cadence of getting

And mortality risk so for US. This is a very strategic transaction and we're benefiting from a market $2 billion of value and reduce mortality exposure going forward.

Some of this excess Capital out from the RGA deal and of of that billion that I guess wasn't deployed into an increased AB stake. Uh ballpark

As you mentioned, we've invested $760 million in alliance Bernstein that increases our stake to 69% and we're also committed to do $500 million of share buybacks in the second half of the year, that's going to be one of the pieces that helped EPS growth on the second half as well and thats going to be above the 60% to 70% payout and with the 1 billion.

With the vast majority of that likely going to buy back today or you still deciding between Debt Pay down and uh, and share repurchase. Thanks.

Remaining I would split it in one piece for <unk>.

As the transaction becomes effect in the third quarter, we will have a loss on the GAAP side related to the assets that move but also with the purchase of Alliance Bernstein.

How that book values that combined puts an impact on the equity in the company. So as a result, we do want to reduce that to make sure. Our leverage ratios are in line with our rating agencies would expect I would think about that anywhere up to $500 million because it'll be a tender offer that we would likely do in the second half.

The year, depending on markets and then with the remaining $500 million, where as always we look for bolt on opportunities within the wealth side across equitable.

We do always look inside cards, and then we will certainly look at it.

Additional share buybacks as we need to drive accretion because of where we trade today as well.

As the I think the FERC as part of your question on future capital deployment.

Post the transaction post the extraordinary dividend and the ordinary dividend of $1 7 billion out of the insurance company, the RBC ratio or the combined entity is above 500% set of capital ratios at the subs are very robust at this time, we don't have any plans to take out any other dividends from.

And while the management and also recognizing we're not a differentiator in owning mortality, um, and mortality risk. Um, so for us, this is a very strategic transaction. We're benefiting from unlocking 2 billion of value and reduce mortality exposure going forward. Uh, as you mentioned, we've invested 760 million in Alliance Bernstein. Um, that increases our state to 69%, we're also committed to doing 500 million of share BuyBacks. And the second half of the year, that's going to be 1 of the pieces that helps EPS growth on the second half, as well as that's going to be above the 60, to 70% payout. And with the billion remaining out, split it in 1 piece for certain, you know, as the transaction becomes effect in the third quarter. Um, we'll have a loss on the Gap side related to the assets that move, but also with the purchase of Alliance Bernstein units. That tell that book value. So that combined puts in um impact on the equity, uh, in the company. So as a result, we do want to reduce debt.

The insurance companies. This year and then next year, we will look at where the ratios are and the organic cash generation and we will look to upstream next.

Next year and then the following year in order to meet our $2 billion cash flow guidance, which come both from the insurance company and 50% from asset and wealth.

Um, to make sure our leverage ratios are in line with our rating agencies would expect, I would think about that anywhere up to 500 million because it'll be a tender offer. Um, that we would likely do um, in the second half of the Year depending on markets. And then with the remaining uh 500 million. We're as always we look for bolt-on opportunities. Um, within the world side across Equitable and ab it we do always look at side cars and then we'll certainly look at it um additional share by

Hey, thanks.

Your next question comes from the line up Elyse Greenspan with Wells Fargo. Please go ahead.

Hi, Thanks.

Putting together I guess, Rob in a lot of the comments that you gave what you guys think EPS growth should pick up in the back half and then obviously it takes time right.

The credit line for repurchase to work out as well.

Business et cetera.

With how you see things I guess would you expect I guess, the second half to be better than the first half I guess below that 12% to 15% target for EPS and let me get back there in 2026.

Taxes. We need to drive accretion um because of where we trade today as well. Um, as the uh I think the first part of your question on future Capital deployment, uh you have to post the transaction. Post the extraordinary dividend and the ordinary dividend of 1.7 billion out of the insurance company. Uh, the RBC ratio of the combined entities is above 500%. So the capital ratio is at the subs are very robust uh, at this time. Uh, we don't have any plans to take out any other dividends from the insurance companies this year. And then next year, we'll look at where the ratios are and the organic cash generation. And we'll look to Upstream, um, next year. And then the following year in order to meet our 2 billion cash flow guidance which comes both from the insurance company and 50% from uh acid and wealth.

Okay, thanks.

Is that kind of the right way to think about it when you think about the moving pieces.

Yes, I think Thats right I think look.

With the tailwind is buying our business to growth momentum.

Your next question comes from the line of Le Greenspan with Wells Fargo Elise please go ahead.

Higher equity markets reduce mortality exposure and additional share buybacks EPS growth will certainly improve in the second half and we'd expect to be back on track for a 12% to 15% and 22026 and then obviously towards 2027% achieved our commitments. We also have levers in place if the market doesn't.

Together, I guess Robin.

It doesn't continue to participate well so we have expense actions that we can take we also have investment actions that we continue to execute on.

You guys said EPS World should pick up in the back half and then you know, obviously it takes time right? For the full credit right for repurchase to work in as well as you know, business growth Etc. Um so with how you see things I guess would you expect? I guess the second half to be better than the first half but I guess below the 12 to 15% Target for EPs. And then we

About 15 billion through our $20 billion commitment into private credit build at AB <unk>. That's helped grow that business with 77 billion and we are getting good investment income off of that as well so I.

Back there in 2026. Um is that kind of the right way to think about it when you think about the moving pieces,

I think where we're positioned today, we see good growth coming into the second half and then going forward, but we're also have levers in place in case.

Things don't materialize as we expect.

Thanks, and then I was hoping just to get something.

Incremental color just on wireless sales in the quarter as it always does.

What youre seeing from a competitive and just.

Market standpoint.

Yes, thanks, obviously.

Obviously, the competitive dynamics have changed since we pioneered the product over a decade ago with that said year to date, we haven't seen any material change in the relative competitive intensity.

Continue to see strong demand growth driven by the demographics the baby boomers moving to the next chapter of their lives heightened by the current state of I would say macro uncertainty.

Yeah, I think that's right. I think look, um, we with the Tailwind buying our business to growth momentum, uh, higher Equity markets, reduce mortality exposure and additional share, BuyBacks EPS. Growth will certainly improve in the second half and we'd expect to be back on track for the 12 to 15% in 20, uh, 2026. And then obviously towards 2027 to achieve our commitments. We also have leveraged in place if the market, you know. Doesn't, um, uh, doesn't continue to participate. Well, so we have expense actions that we can take. We also have investment actions that we continue to execute on. You know, we're about 15 billion through our 20 billion dollar commitment in the private credit. Build at AB, that's helped a grow that business is 77 billion and we're getting good investment income off of that as well. So, um, I think where we're positioned today. We see good growth coming into second half and then going forward. But we're also have leveraged in place in case, um, things don't materialize as we expect

I alluded to our strong sales already in the quarter up 9%.

We're very mindful of competitive trends on pricing as we've mentioned when we see new entrants enter they tend to have a period of aggressive pricing.

Thanks. And then I was hoping to get, you know, some improve incremental color, just on you know Wireless sales in the quarter as well as just you know what you're seeing from a, you know, competitive and just you know, Market standpoint.

We've seen this before and it tends to be temporary.

We focus on value versus pure volume and as the market leader, we've continued to benefit from the growing pie.

I would highlight over the last three years, our sales have more than doubled over that period.

So we believe looking forward, we're in a privileged position to capture a disproportionate share of the value given our asset origination capability, our distribution network and our scale.

Yeah. Thanks. You know, obviously the competitive dynamics have changed since we pioneered the product over a decade ago. With that said, year-to-date, we haven't seen any material change in the relative competitive intensity. We continue to see strong demand and growth driven by the demographics, the Baby Boomers moving to their next chapter of their lives, heightened by this current state of, I would say, macro uncertainty.

And your next question comes from the line of Jimmy <unk> with Jpmorgan, Jamie. Please go ahead.

Good morning, So first just a question for Robin on the buybacks.

The I think the 500 extra that you communicated.

Are you going to be opportunistic in terms of timing of that depending on how the stock price behaves or should we assume that that's going to be more flatlined.

Uh, we're very mindful of competitive Trends on pricing. As we've mentioned, when we see new entrance, enter, they tend to have a period of aggressive pricing. Uh, we've seen this before and it tends to be temporary. Uh, we focus on value versus pure volume and is the market leader. We've continued to benefit from the growing pi.

Yes.

Thanks, Jimmy Yes, we're going to start the 500 million on top of our committed 60% to 70% in the third quarter, we will run that through based on the trading volume that is obviously that gives us a lot of good dry powder to be opportunistic depending on the share price as well. So you should expect it to be active in the market.

I would highlight over the last 3 years our uh sales have more than doubled over that period. Uh so we believe looking forward, we're in a privileged position to capture, a disproportionate share of the value, given our asset origination capability, our distribution Network, and our scale.

And your next question comes from the lineup. Jamie were with JP Morgan Jimmy. Please go ahead.

And then.

You certainly have the ability to do more obviously you have to reduce that as well given the lower earnings base with the reinsurance transaction, but the.

What is it that.

You mentioned, maybe potential tuck in deals or other uses of capital.

Good morning. Uh, so first just a question for Robin on the buybacks. Um, the I think the $500 million extra that you've communicated, are you going to be opportunistic in terms of timing of that depending on how the stock price behaves, or should it be assumed that that's going to be more flatlined?

Besides that reduction.

Like have you already earmarked something for potential acquisitions or is it more that if you don't find anything than maybe the $500 million more likely than not will be increased over time.

Jimmy first we have to get through the $500 million because that's on top of that 60% to 70% payout.

Thanks Jimmy. Yes. Um, we're going to start the 500 million on top of our uh committed 60 to 70% in the third quarter. Um, we'll run that through. Based on you know the trading volume that is and obviously that gives us a lot of good dry powder. If to be opportunistic, depending on the share price as well. So you should expect us to be active anymore.

Shares that we have available to us to buy back so that's going to take time.

So expect us to deploy the remaining proceeds by 2026 and it will be in a combination of share buybacks and if something becomes available to us thats accretive for the wealth management businesses, and equitable aerie be or sidecar that align to our strategy to grow insurance.

Third party insurance mandates over things that we look at as well but.

We have to get through the first portion first and then decades as options going forward, but anything that we do have to drive shareholder value.

And then on the, you certainly have the ability to do more. Obviously, you have to reduce debt as well given the lower, uh, earnings base with the reinsurance transaction. But the, um, what is it that you or you mentioned, maybe potential, tucking deals or other uses of capital um uh beside that reduction. Um, are like have you already earmarked something for potential Acquisitions or um, is it more that if you don't find anything then maybe the 500 million more likely than not will be increased over time.

Jimmy It's Mark if I could just add to that I think and I hope as you've seen over the years, we will be incredibly disciplined. The fact that we've got the money does not burning a hole in our pockets, we will be very disciplined in anything we look at it.

It uh Jimmy first we have to get through the 500 million because that's on top of the 60 to 70 payout. So there's a

And to <unk> point, we know we have.

To beat the baseline of the value that would be.

Accretive to shareholders through share buybacks, so that provides a healthy discipline for us.

And your next question comes from the line of Jack Morton with BMO capital markets. Jack. Please go ahead.

You know, um shares that we have available to us to buy back. So that's going to take time. Um, so expect us to deploy the remaining proceeds, you know, by 2026 and it will be in a combination of share BuyBacks. And if something becomes available to us, that's a creative for for wealth management businesses, and Equitable areeb or, you know, side cards that align to our strategy to grow Insurance. Um, third party insurance,

Hi, good morning.

On the individual retirement.

Insurance mandate. So the things that we look at as well. But, um, we have to get through to First portion first and then, um, that gives us options going forward, but anything that we do will have to drive shareholder value.

How much longer do you expect that.

Sure.

Roll off dynamic to continue as the first six.

Mostly behind US now or is there just a couple.

But more to come over the next few quarters and then on the the earnings baseline for next quarter, just just confirms that assumes no market value.

And that would be.

The less favorable compared to your kind of historical average experience.

Sure.

Expect this.

All of their business to run off definitely over the next few quarters still.

Uh, hi, Jimmy, it's Mark. If I could just add to that, I think. And I hope as you've seen over the years, we will be incredibly disciplined. The fact that we've got the money does not burn a hole in our pockets. We will be very disciplined in anything we look at, um, and 2. Auburn's point. We know we have, uh, to beat the Baseline of, um, the value. That would be, um, a, a creative to shareholders through a share buyback, so that that provides a healthy discipline for us,

And then I also.

We also do not assume any MBA into 220 to $2 25.

And your next question comes from the line of Jackman with BMO Capital Markets. Jack, please go ahead.

Provided during this call, but we should still see this dynamic as I mentioned, it's about 15% at about 300000 'twenty. That's still there so that dynamic is going to run off over the next few quarters. So that'll still occur, but we still have underlying good growth momentum as Nick highlighted and that should come through in earnings.

Got it thanks.

Maybe just one on the Bermuda entity.

Yes.

Benefits from.

Hi, I'm good morning, just a follow up on the individual retirement. Um, business, how much longer do you expect that? That ra, um, roll off Dynamic to to continue? Is it, is it mostly behind us now? Or is there just like a little bit more to come over the next few quarters? And then on the, the earnings Baseline for next quarter? Just just confirm me that assumes, no market value adjustments, and that would just be less favorable compared to your kind of historical average experience.

Material enough that there could eventually be a step change higher and the cash conversion or a payout ratio that you would expect longer term.

Any thoughts on the timing for additional transactions, particularly around potential third party transactions.

<unk>.

Let's say first off.

We really like the.

Bermuda.

Because it really allows us to manage economically as you know we're a unique here and we may have an economic approach on how we manage liabilities and how we hedge that.

For me to framework allows us to fully manage on an economic basis. It means we won't have volatility in any results related to our hedging program and that gives us consistency of cash flow going forward, which is good for shareholders. So it's really about more consistency in cash flow and managing economically at the framework allows us to.

Cheers. Yeah. I I expect this, um, the older business to run off, you know, definitely over the next few quarters still. Um, and then I also, um, uh, we also do not assume any MBA in the 220 to 225, um, that I provided during the fall. Um, but we should still see this dynamic. As I mentioned, it's about 15% of the vote free 2020, that's still there. So that Dynamic is going to run off over the next few quarters. So um, that'll still occur but we still have on the line, good growth momentum as Nick highlighted and that should come through in earnings.

Again.

We just closed the first transaction on June and June So theres still a lot more to be done as I mentioned on the call. We will look at flow reinsurance on new business. We'll look at other internal measures in 2006, and 2007 will execute again and then it gives us Optionality post 2027 and later on if we wanted to look at third party as well.

Thanks man. Um, maybe just 1 on the The Bermuda entity. Um, I guess there are are the benefits from from use that that entity material enough that there could eventually be a step change higher in the cash conversion or payout ratio that you would expect longer term um than any, any thoughts on the time like for additional transactions particularly around potential third-party um transactions with that with that entity.

And your next question comes from the line of Michael Ward with UBS. Michael. Please go ahead.

Michael If you are on mute please UN mute.

That's kind of proceed to the next question.

Our next question comes from the line of cable <unk> <unk> with Deutsche Bank.

Please go ahead.

And I apologize I think I missed Jack's question hopefully its not the same question I'm about to ask but on this $30 billion of annuities reinsured to Bermuda.

Bermuda, um, system because it really allows us to manage economically. As, you know, we're unique here and we have an economic approach on how we manage liabilities and how we hedge. Um, The Bermuda Frameworks allows us to fully managed on an economic basis. It means we won't have volatility in any results related to our hedging program and that gives us consistency of cash flow going forward, which is good for shareholders. So it's really about more consistency in cash flow and managing economically as the framework allows us to uh again uh the we just closed the first transaction on on June and June. So there's still a lot more to be done. As I mentioned on the call, we'll look at flow reinsurance on new business. Um, we'll look at other internal measures in 26 and 27, walks acute again, those and then it gives us optionality, you know, post 2027 and later on if we want to look at third party as well.

Were you able to give us.

A bit of an estimate of the capital benefit from that transaction, maybe not an exact number but it's some kind of a range would be helpful.

And your next question comes from the line of Michael Ward with UBS Michael, please go ahead.

Sure.

As I mentioned, we don't view it as like an excess capital maturity of innovation, because nothing changed in our economic capital from moving.

Michael, if you are on mute, please unmute

<unk>, it's more about forget having consistency of cash flows going forward the capital benefits that we're going to get throughout the year is going to be coming from the RGA transaction, which as we mentioned on lots of $2 billion of value for us.

That's going to proceed to the next question.

Post dividend allows us to run the company at a 500% RBC.

Post all the dividend so that's what puts us in a good capital position and now and Gabe Bermuda transaction gives us the consistency of the cash flow on an economic framework going forward.

Our next question comes from the line of caveman. The survey with Toshi Bank cave please go ahead morning and apologize. I think I I missed Jack's question that hopefully it's not the same question about to ask, but on this 30 billion of annuities reinsured to Bermuda, are you able to give us? Um,

A bit of an estimate of the capital benefit from that transaction. Maybe not an exact number but some kind of a range would be helpful.

Okay. So theres no actual benefits from that transaction, specifically, then I can turn on a lower capital requirement.

Remuda for.

So that type of project.

Yes, the benefit is the consistency of cash flow aligning to our economic hedging program.

Okay and second question is on technology.

Which parts of your business.

I guess could benefit most from the implementation of <unk> and do you think it's more about improving efficiencies or can also help to drive growth.

Great. Thanks for the question, obviously AI is rapidly evolving and being adopted in this space out there.

Sure. Okay. Uh, as as I meant, we don't view it as a like, an excess Capital materialization because nothing changed in our economic capital from moving. Um, to Bermuda, it's more about to get having consistency of cash flows going forward. Um, the capitol benefits that we're going to get throughout the year, is going to be coming from the RGA transaction, uh which as we mentioned, unlocks 2 billion of value for us. And uh post dividends allows us to run the company at a 500% RBC um uh post all the dividends. So that that's what puts us in a good Capital position and now and they Bermuda transaction. Gives us the consistency of the cash flow on an economic framework going forward.

We've built a foundation given that we're in a regulated space that allows us to succeed and scale the benefits primarily in the last phase we've seen it on the operational side.

okay, so there's no actual benefit from that transaction specifically then like in terms of lower Capital requirement in Bermuda for

For that type of product.

Relative to doing mundane tags task and we continue to explore the potential to use it for value added services, such as how we produce alpha or advice model.

Yeah. The benefit is the consistency of cash flow aligning to our economic heading program.

Okay, and now second question is on on technology. Um,

Our conviction is that AI is not going to replace advisors out there, but people that use AI are going to replace people that don't.

Which parts of your your business. Um, I guess could benefit most from the Implement implementation of of Genai and and do you think it's more about improving efficiencies or can also help you drive growth?

So we see the potential to continue to explore and accelerate in this space.

Okay.

And your next question comes from the line of Mark Hughes with Securities Mark. Please go ahead.

Great. Uh thanks for the question. Obviously AI is rapidly evolving and being adopted in the space out there. Uh, we've built the foundation given that we're in a regulated space that allows us to seek seed and scale. The benefits primarily in the last phase, we've seen it on the operational side.

Hi.

Yes, Thank you and good morning.

<unk> impact but.

Lenders in group retirement were a little lower than.

We've been seeing over the last several quarters.

Anything in particular you'd call out there.

Uh, relative to doing mundane tags, uh, a task, and we continue to explore the potential to use it for, uh, value-added services, such as how we produce alpha or our advice model.

Sure.

Mark we've seen.

Lower surrenders in the quarter I think some of it has to do with the equity market decline in April people a bit more steady.

Steady with their money, but we also have actions in place across our businesses to retain more clients as we continue to provide holistic advice to them but.

Um, our conviction is that AI is not going to replace advisors out there, but people that use AI are going to replace people that don't. Um, so we see the potential to continue to explore and accelerate in this space.

But nothing really to call out that's material there.

Yes, understood and then on the.

And your next question comes from the line of Mark Hughes with Securities Mark, please go ahead.

The right side of the business.

Lim Rone for what it's worth.

Do you expect continued expansion more broker dealers are offering these products when you think about your distribution.

Yeah, thank you. Good morning. Um not a big impact but the surrenders in group retirement were a little lower than what we've been. We've been seeing over the last several quarters.

Anything in particular, you'd call out there.

Third party, you've had a lot of success with Blackrock and elsewhere.

But you still kind of a general matter.

Adoption of railroads across the financial services space.

Anything you've seen different lately.

Yes, I'd comment on that.

Look net net I think is the.

Sure. I think we’ve seen lower surrenders in the quarter. I believe something has to do with the equity market decline in April; you know, people are a bit more steady with their money. But we also have actions in place across our businesses to retain more clients as we continue to provide holistic advice to them. Um, but nothing really to call out that’s material there.

Demand has continued to grow given the value proposition of the protected equity story, we are seeing greater advisor awareness and consumer interest for.

The product which is increasing.

Increasing the overall pie itself.

Having been the pioneer in this market 10 years ago.

ERS are offering these products. When you think about your distribution through those.

We were able to secure what I would say privilege distribution, where the product aligns with the investment philosophy of the third party firms for how they need a consumer's best interest.

Third parties. Uh, you've had a lot of success with BlackRock and elsewhere, uh, but just as a kind of a general matter of the adoption of riya's across the financial services space. Anything you've seen different lately

And your next question comes from the line of Burgers with Raymond James Wilma. Please go ahead.

Hey, good morning to start off a little bit this morning, but when I look at the core 25 segment results.

On top of them.

Underlying EPS model estimates most of the noise really seems to be related to the deal can you agree should we start to see more consistent result, the deal close and then you touched on that but is there any additional noise.

I yeah, I'd comment on that. Uh, look now now I think as the, uh, demand has continued to grow, uh, given the value proposition of the protected Equity story. We are seeing greater advisor, awareness and consumer interest, uh, for the product which is

Thank you.

Well, yes, no I expect the results to be stable going forward obviously.

Increasing the overall Pi itself. Um, having been the Pioneer in this market, 10 years ago, uh, we were able to secure what I would say. Privilege distribution where uh, the product aligns with the investment philosophy of the third party, firms for how they need a consumer's best interest.

Essentially decreased by 75% the most volatile part.

We have seen in our results.

Previously so going forward, we expect strong results again coming from better equity markets lower mortality exposure and then the incremental share buybacks of $500 million above the 60% to 70% payout ratio.

And your next question comes from the line of will. My bird is with Raymond James Wilma. Please go ahead.

And could you give a little bit more color on the F&B and program. Some competitors have highlighted drag from high volumes of ethane.

Hey um good morning. This talks off a little bit this morning, but when I look at the core 25, uh, segment results, they were really on top of my underlying EPS model estimates. Most of the noise really seems to be related to the deal.

And <unk> been waiting to deploy assets at higher spreads is this something that's impacting equitable.

Do you agree? Uh, should we start to see more consistent results with the deal closed? Now you've touched on that but um, and is there any additional noise to come through in 3Q?

Or if the company or have you been able to invest the proteins and if it has an impact is there something we should think of spread uplift.

Sure we've been accessing that market as an issuer since 2020 I think it's one again the benefits of having an in house asset manager or an alliance Bernstein that has that origination capability that we can continue to issue fabienne and achieve attractive IRR and similar to our retail business.

Well, yeah, no. I I expect the results to be stable going forward. Um, obviously we read, we essentially decrease by 75%. The most volatile part, um, that we've seen in our results. Um, previously. So going forward, we expect strong results again, coming from better Equity markets, uh, lower mortality exposure, and then the incremental share by backs of 500 million above the 60 to 70.

About 15%, we've issued $3 4 billion year to date, we have 9 billion outstanding and Davey team does a great job of putting that money to work to ensure that we get the yields that we priced for.

And your next question comes from the line of Michael Ward with UBS. Michael. Please go ahead.

And could you give a little bit more color on the Fabian program? Some competitors have highlighted drag from high volumes of Fabians, as they've been waiting to deploy the assets at higher spreads. Is this something that's impacting Equitable? Or has the company already been able to invest the proceeds? And if it is an impact, is there something we should think of on spread uplift? Thanks.

Hey, guys can you hear me now.

Yes, we can.

Sorry about that.

So what that was.

So just another one on <unk>.

So I'm curious how do you.

How do you see this level of sales are you comfortable with this level of sales growth given the market is more mature do you think it might be a little bit more lumpy.

Or is this.

Is this because you don't sound too concerned about it right.

Just.

Sure. We've been accessing the FABN market as an issuer since 2020. I think it's 1 again. The benefits of having an in-house asset manager and Alliance Bernstein that has that origination capability that we can continue to issue FABN to achieve attractive IRS similar to our retail business, you know, above 15%. We've issued $3.4 billion year-to-date. We have $9 billion outstanding, and the A Team does a great job of putting that money to work to ensure that we get the yields that we price for it.

Curious also how you innovate on that on the product side.

Sure.

I believe the pie is going to continue to grow given the structural forces that we highlighted.

And your next question comes from the line of Michael Ward with UBS Michael, please go ahead.

Hi, guys. Can you hear me now?

Reference annuities are still only 10% over the broader retirement market. So we see upside associated with that.

Your second question on innovation, we think about innovation both to extend the edge of our core businesses as well as open up new markets. We are a pioneer in the launch of the <unk> market or going back longer in variable annuities recently, our partnership with Blackrock I didn't play in.

Yes, we can, thanks, okay, I'm sorry about that. I don't know what that was. Um, so just another 1 on rya's. Um, so I'm, I'm curious. How do you? Um, how do you see this level of sales? Are you comfortable with this level of sales? Growth given the market is more mature. Do you think it might be a little bit more lumpy? Um, or is this, you know? Are you are, is this, you know, because you don't sound too concerned about it, right? And, um, just um, curious also how you innovate, uh, on that on the product side?

It is or are pulled employer program. So I think equitable's one of <unk> edge as our customer led innovation and that's where equitable advisers gives us a slight edge because we get real time feedback of emerging client and advisor needs, allowing us to create new value propositions and offers.

<unk>.

Michael It's Marc if I could just sort of take the strategic view I mean, it is very attractive market. That's why a lot of competitors are going in and if you look at the basic demographics and the 4 million Americans to <unk> 65, this year and we will do next year.

Well, there is something like $600 billion of.

<unk> flows coming out of four one K markets. So the core drivers behind the retirement and viola market all very very positive and then just echoing what Nick said position being.

In both advice and product manufacturing and asset management is really really.

Uh, sure. Um, we believe the pi is going to continue to grow. Given the structural forces that we highlighted um, you know, as references uh, annuities are still only 10% over the oh, the broader retirement market so we see upside associated with that. Um, your second question on Innovation, we think about Innovation both to extend the edge of our core businesses as well as to open up new markets. We are a Pioneer in the the launch of the Ryland Market are going back longer and very well, annuities recently, our partnership with BlackRock and implant annuities or are pulled employer program. So I I think Equitable is 1 of Equitable edges are customer-led, Innovation, and that's where Equitable advisors gives us a slight Edge because we get real-time feedback of emerging client and advisor needs allowing us to create new value propositions and offers

And equitable strength so good market good business model, we remain very positive about it.

Okay. Thank you both.

And then just.

One on wealth.

Strong result, there again I'm just curious how you see the growth pipeline there and if there is any.

Uptick in the competition.

The organic side.

Thank you.

Yes. Thank you we see strong demand for advice I'm sure you saw the recent Mckinsey study that stood at 80% of affluent households would pay a premium for human advice and as Mark alluded to.

<unk> move to the next phase.

600 billion.

Dollars coming out of 401 case annually.

Very attractive Market. Uh, that's why a lot of competitors are going in. Uh, if you look at the basic demographics, in their 4 million Americans, turn 65 this year, and we'll do next year, um, as well. There's something like 600 billion dollars of flows coming out of, uh, 401K markets. So, the core drivers behind the retirement and Riya Market are very, very positive and then just echoing. What? Nick said, our position being, um, in both advice in product manufacturing and in asset management is really, really um, an equitable strength, so good Market, good business model, we remain very positive about it.

Equitable advisers, we're very pleased that our value proposition is resonating with clients and advisors as demonstrated by our strong advisory flows 2 billion net flows in the quarter and a 12% organic growth rate on a trailing 12 month basis.

Okay, thank you both. Um,

Um, um, and, and then I just had 1 on wealth. Um, strong result there again. Just curious how you see the growth pipeline there and if there's any, um, uptick in the competition on the inorganic side. Thank you.

When I think about looking forward, we're very encouraged by the underlying growth drivers the 8% improvement in productivity as well as an improvement of head count and I think underlying that is our people.

Our planning and our platform on the people standpoint to your question, we've got a distinct model, where we bring in new.

Talent into the industry and then us expertise as a force multiplier. Our average age is 48 and an industry that screen grain out of 10 years younger which gives us a pipeline and allows us to be disciplined in the ESP hiring space.

Yeah, thank you. Uh, we see a strong demand for advice. I'm sure you saw the recent McKenzie study that stated 80% of affluent households would pay a premium for human advice and as Mark alluded to as baby, we were just moved to the next stage. There's 600 billion, uh, dollars coming out of 401ks annually. Um, Equitable advisors were very

So.

Even given the foundational organic drivers, we're very confident in the future growth of that segment.

There is no further question at this time and that concludes today's call. Thank you all for joining you may now disconnect.

Believes that our value proposition is resonating with clients and advisors as demonstrated by uh, our strong advisory flows 2 billion, net flows in the quarter and a 12%, organic growth rate on a trailing, uh, 12-month basis. Um, when I think about, uh, looking forward, we're very encouraged by the underlying growth drivers. Uh, the 8% Improvement in productivity as well as Improvement of headcount. And I think underlying that is our people, uh, are, uh, planning and our platform on the people's standpoint. We to your question, we've got a distinct model where we bring in new Talent into the industry and then use exps as a force multiplier. Our average age is 48 in an industry. That's green green out. So 10 years younger, which gives us a pipeline and allows us to be disciplined in the EXP uh, hiring space.

So uh, given given the foundational organic drivers. Uh, we're very confident in the future, growth of that segment.

There is no further question at this time and that concludes today's call. Thank you all for joining you may now disconnect

Please wait the conference will begin shortly.