Malibu Life Holdings Limited (MLHL) Earnings Call Transcript & Summary

Hi, everyone. Welcome to Malibu Life Holdings Limited's 2026 Interim Results Webcast. I'm Ryan Holland, Head of Investor Relations. Joining us today on the call will be Malibu's CEO, Todd Schreiber; and CFO, Jeff Liddle. Before we dive into the results, please allow me to draw your attention to the disclaimers, which were flashed at the front of the webcast. Please note that today's call may contain forward-looking statements, opinions and/or projections prepared by or on behalf of Malibu and/or Third Point. Such forward-looking statements, opinions and projections are not guarantees of future performance and involve known and unknown risks and uncertainties. Other important factors could cause actual results to differ from the statements, opinions and projections contained in the webcast. I also just want to point out that the information and opinions presented or contained in this webcast speak as of the date hereof, unless otherwise stated, and are subject to updating, revision, verification and amendment without notice, and such information may change materially. So with that out of the way, I'd like to invite Todd Schreiber, our CEO, to start things off. Todd, welcome.

Thanks, Ryan, and hello, everyone. I'm Todd Schreiber, Malibu Life's CEO. This is my inaugural set of results for Malibu Life, and I'm pleased with the foundation that the team has built as we continue to scale and execute on our ambitious goals. Before getting into the financial results, I want to take a minute to highlight the continued momentum we've seen in the first half of 2026. First, within our reinsurance business, Malibu Life Re, we've continued to execute on our existing treaty, generating an additional $190 million in premium in the first half of the year. These flows have continued to be put to work by Third Point in compelling investment opportunities as we work towards optimizing our strategic asset allocation. And already, we've seen some early proof of concept in our alternatives portfolio, which has led to differentiated returns. We also have a robust pipeline of additional treaties that we are pursuing as cedents have taken notice of our growth and capital position. We expect to come back to you with an update on these opportunities in coming reporting periods. I'm pleased to report that Malibu Life Re also received an A- financial strength rating from KBRA during the first half, reflecting the strong contractual and collateral protections, risk-based capitalization, asset liability management and access to experienced investment capabilities. Meanwhile, we closed on the acquisition of TruSpire Retirement Services on July 1. This is a core element of our growth strategy that will enable us to launch direct in the origination of retail annuities in 43 states plus the District of Columbia. The team has been busy building core capabilities and hiring key personnel ahead of that launch, which we expect in mid-October. TruSpire also received an A- financial strength rating from KBRA and a B++ rating from A.M. Best, the latter with a stable outlook. I would just add that our balance sheet strength rating from A.M. Best was very strong, their second highest rating. Finally, at the company level, we've built the executive team through important appointments and are continuing to scale our operating team. As you know, Malibu Life recently raised $125 million in a follow-on offering. That capital certainty is extremely important as we continue to build premium volume. It gives reinsurance counterparties confidence that we have the capacity to fund transactions over their full expected duration, and it gives us the scale to aggressively build our distribution presence in retail. With that qualitative context behind us, I'll hand it over to Jeff Liddle, our Chief Financial Officer, to talk about the interim results in quantitative terms. Jeff, over to you.

Thanks, Todd. As we outlined during our 2025 annual results, we divide our KPIs into 3 categories that speak to the transition from a listed fund to an operating company. One, Malibu Life Reinsurance SBC; two, the stand-alone metrics of the investment in the Third Point Master Fund; and three, Malibu Life Holdings Limited on a consolidated basis. For Malibu Re SBC, total assets stand at $1.7 billion as of June 30, a level that is approximately 13% higher than year-end. Annuity premiums generated since inception are now $1.6 billion, up from $1.4 billion as of December 31, 2025. Net spread came in at 1.91% as of June 30. As we highlighted during our annual results, we are presenting net spread here as net investment income less the cost of liabilities, where net investment income includes coupon income, realized gains and losses and mark-to-market changes. As such, the positive results in the alternatives portfolio that Todd mentioned are reflected here. Starting with our next set of results for year ended 2026, we intend to complement this presentation with net spread with an additional measure that includes normalized forward-looking investment yield and excludes realized gains and losses and mark-to-market volatility. The fund gained 6.9% for the first half of the year or about $27 million, driven by attribution across the equities and credit portfolios. While the Master Fund bounced back firmly from April market lows, led by some exposure to AI and tech beneficiaries subsequent to 6/30, it gave back some of these gains for some of these same positions came under pressure. Third Point broadly maintained its risk appetite through this technical unwind and continues to see good value in many of these positions looking forward. The $377 million investment balance as of 6/30 does not include the net proceeds from the follow-on equity raise, which were deployed into the Master Fund as of September 1. Like the rest of MLHL's investment in the master fund, these will be redeployed into additional reinsurance and direct origination opportunities in the coming years. Finally, at the holding company level, we ended 6/30 with a book value per share of $36.57, an increase of 9% from December 31, 2025. Again, since these results are as of June 30, this metric does not include the additional effects of the follow-on share offering or the impact of the acquisition of TrueSpire. Total comprehensive income came in at $54 million for the period and total shareholders' equity is $624 million. Now I'll hand it back to Todd to discuss our strategic priorities moving forward.

Thanks, Jeff. As we've highlighted, we have real momentum heading into the second half of the year. Let me talk a little bit about our strategic priorities and where we are going as a company. The U.S. annuity and reinsurance markets continue to be robust. We estimate that roughly 1/4 of all new annuity sales are being reinsured through flow arrangements, creating strong demand for a reinsurer like Malibu Life. As I mentioned earlier, we have an active pipeline of opportunities, which we are working to convert into partnerships. We are also continuing to build that pipeline by identifying new opportunities and through our increased visibility in the market. As we've highlighted previously, our acquisition of TrueSpire included a Bermuda reinsurance entity, and we will look to start to leverage that jurisdiction to increase the opportunity set in reinsurance as well. Finally, we expect to broaden our opportunity set by exploring adjacent liabilities and markets. Now turning to our retail business. Now that we've closed on the TrueSpire acquisition and have rebranded that business as Malibu Life USA, we are laser-focused on launching direct origination and are doing so imminently with a fixed indexed annuity product that includes a GLWB rider. We have big ambitions for the retail annuity business, and you can expect us to continue to expand our product set to serve the broadest set of customer needs. Similarly, we'll continue to scale our distribution through a network of IMO partners. We are embarking on this launch at a time when roughly 11,000 Americans are turning 65 every day. And by 2050, more than 1/4 of the U.S. population will be over the age of 65. Retirement planning is a large and growing space. And the annuities market is expanding alongside it, having roughly doubled in the last 5 years. We are incredibly excited to be charting our course with this wind at our backs. Finally, at the MLHL level, we continue to make thoughtful choices about how to run our company efficiently and we'll continue to be disciplined in the way that we deploy our capital. And so in closing, we continue to make progress against our ambitious goals. And while there is much to do, I am confident in our ability to compete and win in these markets. Thank you for your support.

Great. Thank you, Todd. Well, that concludes our webcast. We appreciate your time and interest. I just want to note that these slides in our interim report and updated financial statements are now available on our website at malibulifeinsurance.com. Please feel free to reach out to us also at ir@malibulifeinsurance.com for any follow-up questions you may have, and we look forward to engaging with you in the coming weeks. Thanks, everyone.