The operator begins the call and introduces Tina Madon, Senior Vice President and Head of Investor Relations. Madon reminds listeners that statements made during the call are forward-looking and subject to risks and uncertainties. These risks and uncertainties are detailed in the company's earnings release and other SEC filings.

The company is making progress in their strategic repositioning and is focused on three key objectives: maintaining a strong capital foundation, optimizing their operating model, and delivering profitable growth. They are confident in their ability to achieve these objectives and create long-term value for shareholders. The company will leverage their strong franchise, trusted brand, distribution capabilities, and diverse product portfolio to meet customer needs and drive future growth.

In the first quarter, the company's results exceeded expectations, with notable highlights in the Annuities and Group Protection businesses. Retirement Plan Services also had a strong quarter with high sales. The company's disciplined focus on growth and margins has contributed to these positive outcomes. In the Retail Solutions segment, Annuities had a strong earnings quarter due to solid returns and favorable equity markets. Sales were lower, but reflected a balanced product mix. The company is also expanding its reach in the Fixed Annuities market and focusing on the growth of its RILA business, despite increased competition in the market.

The company is launching a new and improved RILA product this month, which is expected to contribute to the profitable growth of their business. VA with guaranteed living benefit sales also saw an increase and remains an important part of the overall product solutions. The company's Annuities business continues to benefit from their strong partner network and wholesaling force. In terms of Life business, the decline in sales is due to the company's strategic realignment towards products with more stable cash flows and higher returns. This shift is being supported by product and distribution actions, such as optimizing their wholesaler footprint and focusing on accumulation products.

The company's Life business is undergoing a transformation, with a focus on leveraging their strengths in product, distribution, and underwriting, as well as improving their customer service through digital delivery. In the Workplace Solutions segment, the group business achieved its second best earnings quarter and is working towards a 7% sustainable margin target. The company is prioritizing margin expansion over top line growth and has successfully achieved targeted rate increases while still generating premium growth. Sales in this segment were also higher, driven by a strong supplemental health product suite. The company is making strategic investments to align their offerings with the unique needs of each segment and has expanded their digital and self-service capabilities for customer convenience.

The company has made investments in technology and client service to improve efficiency and support growth in the small market. They have also expanded their product offerings and are confident in their strategy to achieve a more balanced portfolio. In their Retirement Plan Services, earnings declined as expected but first year sales increased by 50%, with particular strength in the mid-large market. The company's unique approach to serving clients and focus on participant outcomes positions them well to compete in their target markets.

The company has a strong pipeline of known wins and expects robust sales in 2024, showing that their strategy is gaining traction. The Retirement business had positive net flows and saw strong growth in newer offerings. The company is investing in and improving their Retirement business for operational efficiency. The company's strategic repositioning is expected to drive sustainable growth and improve profitability, efficiency, and capital flexibility. The first quarter performance was strong, with signs of growth and positive change. The company's actions are strengthening their competitive differentiation and increasing their flexibility. These elements will drive value for shareholders in the long term. The company looks forward to sharing more updates in the future.

In the first quarter, the company's results were impacted by significant items, but their underlying results were better than expected. The first quarter adjusted operating income available to common stockholders was $71 million or $0.41 per share. There were several factors that affected the results, including severance and legal accruals, as well as a balance sheet true-up. The alternative investments portfolio had a return of 9%, slightly below the targeted return, but still strong. Overall, these items had a negative impact of $170 million or $1 per share on the quarterly results.

In the quarter, the company reported net income available to common stockholders of $1.2 billion or $6.93 per diluted share. The difference between net and adjusted operating income was mainly due to favorable market risk benefits and a positive change in the fair value of embedded derivatives related to a reinsurance transaction. The group segment had a strong quarter with operating income of $80 million and a margin of 6.2%, driven by a favorable macro environment, disciplined pricing strategy, and expense management. Premium growth was in line with expectations and the group life loss ratio decreased by over 4 percentage points due to lower incidents and improving mortality trends.

The disability loss ratio increased by 3 percentage points year-over-year, but overall results were within the desired range. The company's Group Protection business continues to show strong fundamentals and execution of their margin expansion strategy. While results may moderate in the second quarter compared to last year's record results, there is expected seasonal upside compared to the first quarter. Annuities reported operating income of $259 million, which included unfavorable significant items due to tax-related items and a balance sheet true-up in preparation for the sale of their Wealth Management business. Excluding these items, Annuities earnings increased by $27 million year-over-year due to higher average account balances and improvements in spread income. Ending account balances also increased by 5% sequentially due to higher equity markets.

The increase in outflows for the quarter was due to favorable equity markets and higher interest rates. A significant portion of fixed annuity block is reinsured, which affects surrender rates. The Annuities business saw growth in account balances and spread margin, leading to earnings growth. Retirement Plan Services reported a decline in operating income due to stable value outflows and crediting rate actions, but this was partially offset by an increase in fee income from higher account balances. Base spread compression is expected to continue in 2024 before stabilizing in 2025. Account balances for the quarter increased due to strength in equity markets and positive net flows after consecutive quarters of outflows.

The Retirement business is expected to grow due to a strong pipeline. Life Insurance reported an operating loss, but Mortality results were generally in line with expectations. Elevated mortality in the Universal Life block was covered by reinsurance, while term business performed better than expected. Expenses are being closely monitored and seasonal drivers and lower Spark-related investments contributed to a sequential improvement.

The company has made progress in reducing unnecessary spending and simplifying the organization. This will lead to benefits in the second quarter and beyond. The company's capital remains stable, with a strong RBC ratio and a high-quality investment portfolio. The company is focused on optimizing its general account through asset sourcing capabilities, managing its commercial mortgage loan portfolio, and improving alternative investment performance.

The company's investment strategy focuses on diversification and taking advantage of less liquid assets and structured asset class premiums. They have expanded relationships with specialized managers to source these types of investments. The commercial mortgage loan portfolio is high-quality and conservatively positioned, with manageable near-term maturities. Alternative investments performed slightly below expectations but still generated positive returns from all underlying asset categories.

The portfolio of the company remains diversified and well positioned for long-term returns. The company's results exceeded expectations, and they are confident in their actions to drive earnings growth and profitability. They also provide an update on the sale of their wealth management business, which will provide a capital benefit and increased financial flexibility.

The operator introduces the Q&A portion of the call and the first question is about the progress towards affiliated reinsurance in Bermuda. The executives give an update on the progress and mention that there is nothing new to report since last quarter. The next question is about the capital position and hedging program for variable annuities and LNBAR. The executives express confidence in the program and mention the potential for a dividend later in the year. The final question is about annuity and fixed annuity sales and the potential for capital optimization through flow reinsurance. The executives confirm that this is a possibility.

The company's fixed annuity sales were down year-over-year, but they have taken steps to improve their presence in the fixed marketplace, such as implementing a more capital-efficient solution and establishing shelf space with distribution partners. This has resulted in higher sales in the fourth quarter and a strong pipeline for 2024. The company is focused on products with stable cash flows and maintaining a balanced mix. As for their capital structure, they plan to hold a buffer over 400, with an ideal level of 420.

The company has recently completed a big transaction and is focused on deleveraging. They have raised $350 million in senior debt and plan to bring down their overall debt levels. They also plan to prioritize repaying their preferred debt due in 2027. Annuity sales were down 10% year-over-year, but the company is focused on achieving risk-adjusted returns and maintaining capital efficiency. However, the second highest quarter for Annuity sales was achieved in the past four quarters, outside of a record-breaking fourth quarter.

The company has established capabilities in the fixed annuity space and is focused on working with select distribution partners to achieve target returns without solely competing on price. Sales in the RILA space were down, but the company is launching a new product, RILA 2.0, with unique features to drive sales. Variable annuity sales are strong, with high returns. Overall, the company has $2.8 billion in annuity sales and a strong pipeline for 2024. There have been no major changes to the distribution footprint.

Ellen Cooper, speaking on behalf of the company, addresses concerns about recent departures in the distribution organization. She clarifies that these departures were within the wealth management organization and not related to the wholesaling distribution for retail or workplace businesses. She emphasizes that the company's distribution footprint continues to expand and enhance, with no major changes. They have a strong presence in the annuity space and are aligned with industry partners. On the life side, they have realigned their distribution team to be closer to decision makers and are seeing progress in their product shift and improved pipeline in the IUL space.

The speaker discusses the enhancements made in the distribution footprint and the expansion of the workplace side, which is expected to accelerate sales. The next question is about the Life Insurance business and the speaker clarifies that the first quarter was in line with expectations, but adjusting for notable items, there was a loss. However, the guidance for the full year is for modest earnings, taking into account the seasonality of the business, with the first quarter being heavier due to mortality.

The speaker asked a question about the capital benefit from a wealth management deal, and the response clarified that the company intends to hold a buffer of $420 million and will use the rest for debt actions. The company also mentioned that they ended the first quarter with slightly better capital and will be closing a transaction soon. They thanked everyone for joining the call and invited any additional questions to be sent via email. The call ended.

This summary was generated with AI and may contain some inaccuracies.