Corebridge Financial, Inc. (CRBG) Earnings Call Transcript & Summary

All right. Thank you, everyone, for being here. The next session is with Corebridge Financial. And first, I'd like to say thank you to Kevin Hogan, CEO, for joining us today for the discussion. I thought we would start with, I think, an opening statement that Kevin is going to make, and then we'll go through a series of questions.

Fantastic. Thanks, Alex. I appreciate the opportunity to be here this afternoon. I want to thank Barclays for organizing the Global Financial Services Conference, and everybody here in the room for joining us this afternoon, it's a little bit difficult for me to believe. But in the next week, we're going to celebrate the 2-year anniversary of the IPO of Corebridge Financial. And as I think back on it, I'm very proud of what our team has accomplished in that time. We've returned $3.5 billion of capital to our shareholders. We've grown our premiums and deposits by 34%. And we are well on track to deliver the financial targets that we set at the time of IPO, including a 12% to 14% return on equity, even though alternative returns are returning at a slightly lower level than our long-term expectations. And we're already on track to deliver the 60% to 65% payout ratio on adjusted after-tax operating income, even excluding the U.K. life transaction this year. And the fact that we were able to accomplish all of that while also completing a complex separation from our former parent company and also the divestiture of our international operations, I think, reinforces our execution capability. And now what Corebridge Financial is, is a pure-play U.S.-focused life and retirement specialists, and each of our 4 businesses, Individual Retirement, Group Retirement, Life Insurance and Institutional Markets are leaders in their markets. They have a strong distribution platform, a differentiated go-to-market strategy. And all of them benefit from one of the most important macro trends in this country, which is the aging of America. And we've been focused on 4 strategic levers to deliver what we've delivered up until now, and we continue to have upside in each of these levers. First is organic growth. And when I say organic growth, I mean modest organic growth, enough organic growth to be able to grow our earnings and cash flows so that we can not only provide an attractive return to our shareholders but a growing return to our shareholders. Our sources of income are up 15% since the IPO. And as I said, each of our businesses are very well positioned. And we're not dependent on any one rate environment or any one external environment. They have multiple products, multiple channels, multiple sources of income. The second lever is balance sheet optimization. We actively manage our ALM profile, which we think is important -- the nature of our business. But we're also optimizing our asset portfolio. And as an indication of that, over the last couple of years, we've actually improved the credit quality of the portfolio to single A from A minus while also increasing yield. And we have further opportunities to optimize our balance sheet and our asset portfolio. And with our strong origination platform, we continue to source assets which are attractive to support the liabilities representing the products that we sell. The third lever that we're pulling is expense efficiency. We delivered on the Corebridge Forward, modernization and expense reduction program. We've delivered $280 million that is already earned-in of the $400 million run rate savings, and we anticipate the bulk of the remainder of that to earn in this year. But we haven't stopped there. We're using the capabilities that we built to continue focusing on expense efficiency and adopting a philosophy of continuous improvement. And the fourth lever is active capital management. We've demonstrated that since the IPO, and it continues to be a focus of ours. We're committed to that 60% to 65% payout ratio. And we are confident in our ability to continue to grow earnings per share. Like I said, we have multiple products, multiple sources of income. We're not dependent on any one external environment. We have a strong balance sheet, high-quality investment portfolio and we're executing with discipline. So I feel really strongly that Corebridge continues to represent a compelling investment opportunity.

Thank you for those comments. I'm going to come back to a lot of different pieces of that through the conversation. But maybe you could start on the annuity market. We've seen very robust sales for both Corebridge and the broader market. How much of that do you see as being interest rate-driven versus things that are more sustainable to the growth trajectory of your spread-based products?

Yes. I think it's much more than just the recent interest rate cycle. Actually, this isn't just a moment in time -- there are 3 structural drivers to the annuity opportunity in the country. And the first one I touched on it at the beginning which is the aging of America. With 4 million people turning 65 this year and each year for the next decade, the driver of the demand is going to be significant. And it's related to the second factor, which is the adviser community, the support of the adviser community. There's a whole new generation of financial advisers that have started to understand the value of a fixed income-oriented products as part of a long-term savings plan. And we're seeing that in multiple channels, not just in the bank channel but also in the broker-dealer channels, financial advisers. And certainly, the interest rate environment is something that's helped. It's helped relative to the timing of these long-term investment plans. But the most important part of the curve to pricing annuities is the belly of the curve, the 5- to 10-year area. And if you even look at what the forward expectations are for that part of the curve, I think that these products are going to continue to be a very attractive part of a long-term savings plan. The other thing that I would say is that there's a broad range of annuities out there -- not all products are interest sensitive. We have a broad range of fixed annuities, indexed annuities, variable annuities. Each of which have both income solutions as well as accumulation solutions. And so we have a very strong relationship with our distribution partners. We focus on the top 50 distribution -- independent distribution organizations in the country. And we understand that each of them have slightly different strategies -- to work with their advisers. And so we have a broad range of products to serve what the adviser strategy is for a particular customer at any given time. And so I don't think of this as a moment in time. I actually think of this as our moment to serve. Then I'll also add that whilst we have a broad product range, we are looking forward to introducing our own version of a RILA product sometime before the end of the year. We serve a broad range of customer needs and the risk appetite for RILA is slightly different than our other products. So we actually see a long-term upside opportunity in the annuities, it isn't just dependent on the rate environment, but the conditions are very attractive for the business for the foreseeable future.

Very helpful. Maybe drilling into pricing a little bit. Can you describe the competitive environment you see there? I guess, particularly, we all see and hear more from the private equity-backed insurance companies and some of the private debt origination activity out there? And just in the context of all of that, where are you seeing on price stand?

Look, I mean, the market is competitive. Price is relevant. But we haven't seen behavior that I would characterize as irrational. And the way I think about that is whether or not we are able to achieve our new business margins on the business that we're writing, and we are and we're comfortable with the business that we are writing. And so I think that's one context relative to that. The second thing that I would say is that we're -- spread income is only one of our sources of income. We have multiple sources of income. And so as I mentioned, we can serve our advisers in a variety of areas and products. Back to the competitive environment. We have a very strong relationship between our investments team and our business teams. And we're aware of what assets are available at any given point in time to support products. And we'll never issue a liability, that we don't know what the asset strategy is to support it. But at the same time, we have a broad enough set of liabilities that when attractive assets are available, we have the confidence that we can acquire them and find a way to put them to work. And we've long been in the spread businesses. So a relevant part of our liabilities do have illiquid periods. And so for the liquidity part, of the liabilities, private and structured credit has long been one of the asset classes that we originate in order to support those liabilities. So whilst that's something that may be new to some parts of the market, that has been an element of our strategy for some time. And when we like private and structured credit, we have illiquidity premium that we can be able to take advantage of as opposed to going up the risk curve. We like the structural subordination. We like the credit protections as opposed to unsecured credit and unsecured credit is always subject to idiosyncratic risk. So our asset strategy reflects our liabilities. And we are pricing new business to what the conditions are now, and we're comfortable with where that new business pricing is. And as I pointed out, we have a multiple range of products and multiple sources of incomes, and we have great relationships with our distribution partners. And our strategy is to understand not just what they want on the shelf 1 or 2 quarters from now, but what their strategy calls for 1 or 2 years from now, which allows us to start to build products and services now to support their strategies then. And just as an indication of that, of the retail annuities that we sold in the last year, 30% of them have a feature, which is proprietary to a single distribution partner. And so we have a lot of differentiation. We support adviser strategies. And yes, the environment is competitive, but we find it to be rational and the business that we're writing is very attractive.

Got it. Next one on reinsurance. I thought I'd ask both about Bermuda and some of the things you're doing with internal reinsurance, that are relative to the business as well as third-party reinsurance and optionality with some of these structures can give you.

Sure, absolutely. So let's start with Bermuda. We're always looking for opportunities to optimize our regulatory capital. And we see Bermuda as the next tool in our toolkit relative to that. There are certain products -- the Bermuda regulatory environment favors certain products and also economic principles. And one of them is type matching of assets and liability profile. That's a part of our management strategy. It has long been. And so there are certain of our products, not all of them, but certain of our products that benefit from that environment. And we chose to start by reinsuring part of our new business sales of fixed annuities and indexed annuities. But as we look at our further use of Bermuda, there are other products that we can begin to reinsure some of our new business into Bermuda. But then as a next step, we have the opportunity to potentially engage in portfolio transactions. They also have characteristics that benefit for the Bermuda environment. And as we expand in Bermuda, look, Bermuda is an environment where there are opportunities to potentially attract third-party capital. And at an appropriate time, we will further explore that potential, more broadly relative to transactions, we're also always looking for opportunities to optimize our portfolio. And I think we've, over the years, demonstrated the ability to execute transactions both large and small. On the larger end, when we created Fortitude Re and divested of that, that demonstrated our ability to execute complex transactions. And more recently, the sale of our international subsidiaries generating $1.3 billion in proceeds we demonstrated our ability to act efficiently there. So we're constantly on the lookout for further ways to optimize the portfolio that includes external reinsurance transactions. And we're -- we've been in a number of discussions. Some go further than others relative to that. But any transaction needs to be accretive for our shareholders. It needs to be accretive in terms of value. It needs to be accretive in terms of structure, and risk and so forth. And so we are prepared to act as we identify a transaction that benefits our shareholders, and I think we've demonstrated the ability to execute efficiently.

And next, if we could, I guess, go back to the spread conversation a little bit very topical part of the conversation and sort of sensitivity to the shape of the interest rate curve, and I think some of the banks were given disclosure and so forth earlier today. So I thought I'd ask you the question of what's your sensitivity to the curve, short interest long and what matters the most for your business?

Yes, sure. Thanks, Alex. Appreciate it. Look, of course, in our portfolio, there's certainly some elements of interest rate sensitivity as much related to our active asset liability matching strategy as anything. You're asking about the spread businesses. And then the spread businesses are just one of our businesses. As I mentioned, 54% of our sources of income. And as I think about managing the spread business, I'll talk about the new business part separately from the in-force. In terms of new business, because of this close relationship that we have with the investments and the new business team, we're pricing to current conditions, where yields are and credit spreads are. We're not trying to guess where they go. And with our capabilities for the most sensitive product that right now, which is fixed annuities, we reprice once a week. We have the ability to reprice more frequently during the pandemic, there were times where we were repricing daily, when there was external volatility that warranted that. And so we will price the new business at what today's spreads are. And if we can make our margin, we'll deploy that capital. We have other products, other channels that we can mobilize that capital to. We have other options if we're not able to make those margins. But right now, we're confident that we will, based on the drivers that are there and the competitive environment that exists. So looking forward, whatever the external environment is, that's one strategy. Let's now talk about the in-force. So we believe in ALM, it's one of our disciplines. And so as the rates change going forward, we expect that the earnings from the in-force Are going to earn through per our expectations. And so we're confident in our ability to price the new business. We're comfortable with the in-force. And as I talked about, the part of the curve that's most sensitive for the pricing of the new business is that 5- to 10-year area. And even looking at what the forward outlook for that is we're confident in the business there. So we're confident in delivering a growth in earnings per share. We're not dependent on any one product or channel or any one external environment.

Very helpful. Maybe sticking with net investment income for a moment. Alternative returns have been something that investors have also been focused on over the last couple of years. Could you talk about your current outlook for, I guess, alternative returns or variable investment income more broadly?

Yes, absolutely. So our alternatives portfolio, as a reminder, is about $5.5 billion. Around 75% of it is private equity, 25% real estate equity, and we have a small portfolio of hedge funds. And the alternatives we expect over a long period of time to return 8% to 9%. And -- they do not always return that. Sometimes they return less like the last couple of quarters, sometimes they return more. If you look over the last 5 years, our alternative returns have been around 14%. And -- and so it's a comfortable part of the asset allocation that we have. In terms of the third quarter, we're seeing trends similar to the second quarter, and we expect alternative returns to be in the same follower ZIP code. As we expected, real estate equity, we think will perform a little bit better in the second half than what it did in the first half. But as returns are coming in for the third quarter, we are aware of some losses on the hedge funds and also on some call and tender activity that may offset that. And so in a nutshell, in the third quarter, we would expect the dollar returns for alternatives to be in the same ZIP code as in the second quarter.

Maybe touching on overall credit. Can you discuss how you'd expect your investment portfolio to perform in a recessionary period? And is there any tactical things you'd point out about the portfolio and some of the actions that I think you mentioned in your opening remarks?

Yes, sure. Absolutely. So first of all, we have a high-quality investment portfolio. 95% of it is investment grade. It is also a highly diversified portfolio. And diversification is an important part of our credit management strategy. The third thing is that we do believe in active management of the portfolio. And going back to the beginning part of the pandemic, we began derisking certain elements of it. And more recently, we've continued that. And we've been able to improve the credit quality in the portfolio, as I mentioned, to single A from A minus while maintaining or increasing the actual yield in the portfolio. And we've been able to do that by selling some of our higher yield investments and reallocating to higher grade investments and capturing comparable returns at a lower capital charge, and we continue to do that. We did some of it in the first half. We've done quite a bit of it in the last 2 years. And so we believe in active portfolio management, and the next thing I would say is that we've historically had a conservative, a prudent, I should say, reserving philosophy. And so we're comfortable with the reserves that we have in the portfolio. So with a strong balance sheet that we have, with the multiple sources of income that we have, with not being dependent on any one product or channel at any given time. And with the high-quality, well diversified, actively managed asset portfolio as well as a prudent reserving position, we believe that we're as well positioned as anyone could be for a credit event that might be related to some potential recession. And I talked about private credit before. We get questions about private credit. We actually see private and structured credit as a very relevant asset class to support the liabilities in our portfolio, and we're comfortable with our position there.

And maybe before we leave the investment portfolio, -- any update you can provide just on how the commercial mortgage loans are performing and particularly the office portfolio?

Sure, absolutely. So like the rest of our asset portfolios, our CML portfolio is high quality and well diversified. Our largest allocation is to multifamily. But you asked about the office portfolio. So our U.S. office portfolio is about 2% of our invested assets. The sector is under some pressure as we had talked about at the time. But we have continued to see the portfolio evolve as we had anticipated. The balances are down about 10% year-over-year associated with paydowns in the portfolio. And we have a well-distributed maturity profile. For this year, we have about $100 million of maturities left, and we're already starting to focus on maturities for next year. And as with the rest of our investment portfolio, we believe that we are prudently reserved. We've increased our reserves in this portfolio to around 6%, which I think you will find is on the more conservative end. And that reflects our philosophy. And so the sector is under some pressure. It's performing largely as we had expected. And we are confident that with our strong balance sheet and diverse sources of income, et cetera, that any exposure we may have for losses in the commercial mortgage loan area, the office area is something that is manageable for us and it's going to play out over a long period of time.

Got it. Maybe pivoting over to some of the Institutional Markets business in particular, the pension risk transfer business. How do you see that evolving through the year, just given the back half tends to be a little heavier?

Yes. So we focus on a subset of the PRT business. It's not quite as seasonal. Since 2016, we focused on the full plan termination space, a subset of the market. And we focus on that because in order to administer these more complex programs, there are fewer participants, and therefore, we find the economics more attractive. Now we treat each of these transactions as if they're a miniature M&A transaction. We have to understand both the liabilities and the assets and the economics from a variety of different perspectives. And so starting with the liability side. Back in 2016, we began building the data sources to be able to understand the optionalities in the liabilities. And so the first phase is really understanding the liability profile and how it's going to evolve over time. The next phase is then determining, whether the assets that are necessary to support that liability profile and determine that portfolio. And in these transactions, most of the times, we get paid, not necessarily in cash but in assets in kind. And so the third element is making sure we have the strategy for transitioning from the assets that you get to the assets that you need and appropriately hedging those exposures to not take on any undue risk. So as you can imagine, these are more complex transactions that close negotiations with the consultants and with clients. And therefore, we don't necessarily have one to announce each quarter. But over time, we do expect that this portfolio is going to continue to grow. The pipeline in both the U.S. and in the U.K. is very strong. This year's expected the volumes are anticipated to be about the same as last year's, and our outlook for next year is actually in the comparable area. So this is a long-term growth opportunity for us. And in the first half of the year, our reserves are up 17% in the pension risk transfer space year-over-year. So in pension risk transfers, like the rest of our Institutional Markets business, we have confidence in our ability for it to contribute to our growth in earnings and cash flows over time and contribute to our ability to grow our earnings per share.

So next on to switch over to the Life Insurance business. And I was interested in the growth opportunities you see there, particularly in light of, I think, some of your peers that you compete with that maybe have some legacy issues that you guys are fortunate to not have in that business. Does that create an environment that you can seek out some good growth?

Yes, absolutely. Look, risk management is a core part of our strategy, and it has long been and it was of our predecessors. And so we have been able to avoid some of the industry pitfalls such as we've never -- we haven't had a reserve issue on guaranteed universal life. And frankly, we have no long-term care. And that means that we can focus on the portfolio and how we're going to grow the portfolio. And we chose to focus on a subset of the Life Insurance business a number of years ago that is less interest rate sensitive than the broad part of the market and that we believe represents a long-term growth opportunity. And so we have our leading term suite. We have a strong index universal life suite. And more recently, we've been investing a lot in our middle-market capabilities. And I think in our investments in the data infrastructure that's necessary in the predictive modeling that supports that business and the automated underwriting as well as in the digital customer experience are what have allowed us to grow -- outgrow the market 8 consecutive quarters. And I think there's a long-term upside opportunity in each of those areas because the macro opportunity that drives the Life Insurance business is both the aging of America, but also the fact that there are 60 million people that are either uninsured or underinsured in the marketplace. And those 2 trends together, I think, are driving a lot of that opportunity. So life is a very important business to us, and we see the upside of growing both its earnings and cash flows and contributing to our growth in earnings per share over time.

Very helpful. I wanted to go back to the conversation on aging population in the U.S. in this whole count Peak 65 age cohort over the next several years. What are some of the challenges and opportunities that presents your business?

So Peak 65, I think, essentially defines our marketplace. The fact that 4 million people are going to turn age 65 each year for the next decade. Each of our businesses serves needs directly related to that macro trend. So in individual retirement we have multiple products. We have fixed and indexed and variable annuities, both income solutions and accumulation solutions. We have strong relationships with our distribution partners, and we meet what each of the strategy is relative to their advisers. And so individual retirement, extremely well positioned and we're introducing our own RILA sometime before the end of the year, which really is the next step in our product suite there. In the Group Retirement business, we haven't talked about Group, but we have a very profitable and strong in-plan business, but the real growth opportunity and where we serve this Peak 65 opportunity is in the wealth management opportunity in that business. And we have two opportunities to serve. We serve during the in-plan period, while employees of participants are working. But then we have the ability to build a relationship with them to serve them after they retire. Of the 1.9 million customers in our Group Retirement business, 1.7 million of them have yet to retire. And so that's a huge opportunity for our field force of advisers to build relationships and to serve that wealth management opportunity over time. And just as a snapshot. The people that have retired that we serve represent 14% of the customer base but 34% of the assets in Group Retirement. So that wealth management opportunity is significant. In the Life Insurance business, the investments we've made in our digital platform are making it easier for customers to buy and, I talked about the macro trends there. And then Institutional Markets, Ultimately, the pension risk transfer business is also an outcome of that aging of America as companies look to derisk of their pension obligations. And so Peak 65 defines our marketplace. It defines our opportunity, and that opportunity is significant.

Next, let's move over to capital management. How do you think about Corebridge's capital generation capacity and maybe just an update on the pecking order for how you think about deploying it?

Yes, absolutely. So look, since the IPO, I think we've demonstrated our focus on active capital management. We paid our first dividend, I think, in 30 months -- 30 days from the IPO. We engaged our repurchase program about 6 months from the IPO, we've returned $3.5 billion since then this year. We've already returned $1.4 billion to shareholders. So clearly, we're committed to that as a part of our strategy. And our strategy is to maintain a strong balance sheet while providing an attractive growing cash return to our shareholders. And our insurance subsidiaries are strong enough to be the foundation of that opportunity. Our subsidiaries have distributed $2 billion a year for the last couple of years to the parent company. And because we have the opportunity to not only provide that return to shareholders, but also invest in growth in the business right? One of my strategies is modest organic growth to grow the earnings and cash flows so that we can then grow that shareholder return over time. And if you look at the distributions from our insurance subsidiaries this year, that's also beginning to show modest incremental growth, which is how we're going to meet this promise. We're focused on the 60% to 65% payout ratio, excluding transactions, et cetera. And over time, that's going to as we grow our earnings per share, we have a strong balance sheet, multiple sources of income. We're not dependent on any rate environment. We're going to be able to deliver on that promise of growing earnings per share and providing that attractive and growing cash return to shareholders.

I wanted to circle back quickly on the wealth management opportunity you mentioned in VALIC. I know VALIC got its niche, and I think sometimes looking at these businesses, you sort of get lumped in with 401(k) and so forth. I mean can you talk about the unique relationships that your advisers have with the customer base there and why there's an interesting opportunity?

Absolutely. Group Retirement -- the heart and soul of group retirement is VALIC Financial Advisors. Our field force of 1,100 financial professionals. And they play 3 important roles for the Group Retirement business. The first is -- they are the face of our relationship with our plan sponsors. And we've chosen a number of years ago to focus on those planned sponsors that want human advisers actively involved with their participants. That's a part of our business model. And so that element of the relationship with the plan sponsors is very valuable. Plan sponsors know that when our advisers work with our customers, they're likely to save 35% more and have 50% more assets at retirement than their participants that don't work with the advisers. So I think that's a very important element of that business model. Now we have the opportunity. Our advisers work with participants while they're in-plan, young school teachers or young health care workers, et cetera, getting off to the right habits early on and building those over their careers. And that's our implant business. And like the rest of the defined contribution industry for the last number of years, we've seen some outflows in that in-plan business. But the earnings have been very stable. And that is the base on which we can build this next opportunity that I'll talk about, which is the relationship that the adviser has as those participants reach retirement and household asset consolidation and can continue to serve them past that retirement period. And VALIC Financial Advisors is a full-service broker-dealer to registered RIA. They have all of the services available that any independent financial adviser firm would. And we also have a proprietary product suite that reflects the experience that we have in our Individual Retirement and our Life business that have to fight and compete in the independent marketplace. And so the features in the products that the VALIC Financial Advisors have available reflect being honed in that competitive independent marketplace, and we bring the best-of-breed features to those products. And so our VALIC Financial Advisors are very equipped to serve that opportunity. And I just cited the numbers, but it is compelling. 1.9 million customers in Group Retirement, 1.7 yet to retire -- and the people that have retired, 14% of the customer base, 34% of the asset base. So we believe that the Group Retirement business is going to be a long-term contributor to the growth of our portfolio and the shape of our earnings profile across the portfolio.

Very helpful. Moving around a little bit. But if I go back to individual annuities for a moment, the surrenders were elevated during the period, and a lot of that was associated with interest rates, so maybe isn't as topical and undermine investors at the moment. But I just wanted to ask you -- how are you seeing those trends progress? Are you starting to see that cool off as interest rate expectation shift and change?

Yes, absolutely. So we have -- as you know, we have a long experience in the fixed annuity business. We've been in it for decades. And in our experience, what drives surrender rates is where base rates and credit spreads are that determines generally where crediting rates are going to be in the market. When crediting rates are up, surrender rates are up, when credit rates are down, surrender rates are generally down. And we haven't really seen anything in this most recent interest rate cycle that have been outside of our expectations. The second thing that does drive sometimes surrender rates is when there are blocks of business that are exiting their surrender protection. And because this is a very interest rate-sensitive business, sometimes they're a large block of sales, natural when they come up to their 5- or 7-year period, whatever it may be, that you'll see a spike in surrender rates. And we know that, that is temporary. And we did have one of those earlier this year. We anticipated it. We talked about it. We saw it in the first quarter. And then in the second quarter we saw surrender rates begin to normalize. In our second quarter, surrender rates were the lowest in 5 quarters. So far, in the third quarter, we've seen a continuation of that trend. And so we have a lot of experience in the fixed annuity business. Managing force portfolio, managing crediting rates, being prepared for managing surrenders it's a part of managing that business. And it's a part of that managing -- that business that we're prepared for.

Maybe the last one I'll ask is just on valuations and Life Insurance is more broadly Corebridge. When you look at valuations relative to broader market or financials and so forth -- you're still under a fair amount of pressure even though the environment been pretty benign to credit thus far, and rates have been pretty supportive. What do you think Corebridge needs to do to change that perspective? Or what do you think is being misunderstood by the market?

So look, I mean, we're focusing on what we can control. And what that means is we're focusing on executing on our strategies, delivering on our commitments and maximizing shareholder value. We have a very strong foundation off of which to build. We have multiple products, multiple channels, et cetera. We have 4 market-leading businesses, each of which have a very strong distribution platform that represents decades of experience. And each of them are supported by this extremely important macro trend of the aging of America. So in terms of our market positions, but we're in a very strong position. We have a highly diversified portfolio. Each of our businesses has multiple products. They serve multiple channels. We serve different customer needs, different risk appetites, and we continue to add to that portfolio with RILA coming up in the second half of the year. And that means that we have diverse sources of income. And then we're not subject to any particular rate environment or any particular external environment, but we'll have sustainability over time. We have a strong and clean balance sheet. We have been focused on risk management. We have avoided many of the legacy pitfalls, and we have minimal legacy exposures in the balance sheet. We have a high-quality carefully managed investment portfolio. And we've recently enhanced our origination capability with partnerships with 2 of the most powerful originators of assets that are attractive for our industry. And so we feel great about our position relative to our investment strategy, a strategy that we control. We decide what our ALM position is. We determine what our origination partners are providing for us. It fits our strategy and our portfolio. And we're delivering very strong financial results. We've delivered on the 12% to 14% IPO. We're delivering on that 60% to 65% payout ratio. We are confident in our ability to continue to grow earnings per share. And I think that's what we have to do. So with multiple products, multiple channels, multiple sources of income, no one influenced by whatever external conditions are, a track record that we're developing of disciplined execution -- of committed to an attractive and growing cash return to shareholders, we think that Corebridge represents a compelling investment opportunity.

I think that's a good place to end. We're at time. So thank you very much for joining us.

Thank you very much for having us. Thank you.