Corebridge Financial (CRBG)

Retirement solutions provider Corebridge Financial (NYSE:CRBG) reported Q2 CY2025 results beating Wall Street’s revenue expectations, with sales up 5.8% year on year to $4.42 billion. Its non-GAAP profit of $1.36 per share was 17.5% above analysts’ consensus estimates.

Company Overview

Spun off from insurance giant AIG in 2022 to focus on the growing retirement market, Corebridge Financial (NYSE:CRBG) provides retirement solutions, annuities, life insurance, and institutional risk management products in the United States.

Life insurance companies collect premiums from policyholders in exchange for providing a future death benefit or retirement income stream. Interest rates matter for the sector (and make it cyclical), with higher rates allowing insurers to reinvest their fixed-income portfolios at more attractive yields and vice versa. Additionally, favorable demographic shifts, such as an aging population, are driving strong demand for retirement products while AI and data analytics offer significant opportunities to improve underwriting accuracy and operational efficiency. Conversely, the industry faces headwinds from persistent competition from agile insurtechs that threaten traditional distribution models.

Corebridge Financial competes with major retirement and insurance providers including Prudential Financial (NYSE:PRU), Lincoln National (NYSE:LNC), Equitable Holdings (NYSE:EQH), and Brighthouse Financial (NASDAQ:BHF). In the institutional markets segment, it also faces competition from MetLife (NYSE:MET) and Principal Financial Group (NASDAQ:PFG).

Big picture, insurers generate revenue from three key sources. The first is the core business of underwriting policies. The second source is income from investing the “float” (premiums collected upfront not yet paid out as claims) in assets such as fixed-income assets and equities. The third is fees from various sources such as policy administration, annuities, or other value-added services.

Regrettably, Corebridge Financial’s revenue grew at a sluggish 3% compounded annual growth rate over the last five years. This was below our standard for the insurance sector and is a tough starting point for our analysis.

Long-term growth is the most important, but within financials, a half-decade historical view may miss recent interest rate changes and market returns. Corebridge Financial’s performance shows it grew in the past but relinquished its gains over the last two years, as its revenue fell by 5.6% annually. Note: Quarters not shown were determined to be outliers, impacted by outsized investment gains/losses that are not indicative of the recurring fundamentals of the business.

This quarter, Corebridge Financial reported year-on-year revenue growth of 5.8%, and its $4.42 billion of revenue exceeded Wall Street’s estimates by 7.3%.

Net premiums earned made up 42.3% of the company’s total revenue during the last five years, meaning Corebridge Financial’s growth drivers strike a balance between insurance and non-insurance activities.

Net premiums earned commands greater market attention due to its reliability and consistency, whereas investment and fee income are often seen as more volatile revenue streams that fluctuate with market conditions.

When insurers sell policies, they protect themselves from extremely large losses or an outsized accumulation of losses with reinsurance (insurance for insurance companies). Net premiums earned are:

• Gross premiums - what’s ceded to reinsurers as a risk mitigation and transfer strategy

Corebridge Financial’s net premiums earned has declined by 2.9% annually over the last four years, much worse than the broader insurance industry.

When analyzing Corebridge Financial’s net premiums earned over the last two years, we can see its woes have continued as income dropped by 25.1% annually. Since two-year net premiums earned underperformed total revenue over this period, it’s implied that insurance policies were a detractor of consolidated growth.

Corebridge Financial produced $1.19 billion of net premiums earned in Q2, down 6.5% year on year.

Revenue growth is one major determinant of business quality, and the efficiency of operations is another. For insurance companies, we look at pre-tax profit rather than the operating margin that defines sectors such as consumer, tech, and industrials.

Insurance companies are balance sheet businesses, where assets and liabilities define the economics. Interest income and expense should therefore be factored into the definition of profit but taxes - which are largely out of a company’s control - should not. This is pre-tax profit by definition.

Over the last two years, Corebridge Financial’s pre-tax profit margin has fallen by 7.3 percentage points, going from 14.8% to 7.5%. Said differently, the company’s expenses have increased at a faster rate than revenue, which is usually a bad sign in mature industries (the exception is a high-growth company that reinvests its profits in attractive ventures).

Corebridge Financial’s pre-tax profit margin came in at 21.3% this quarter. This result was 10.4 percentage points better than the same quarter last year.

Insurance companies are balance sheet businesses, collecting premiums upfront and paying out claims over time. The float – premiums collected but not yet paid out – are invested, creating an asset base supported by a liability structure. Book value captures this dynamic by measuring:

• Assets (investment portfolio, cash, reinsurance recoverables) - liabilities (claim reserves, debt, future policy benefits)

BVPS is essentially the residual value for shareholders.

We therefore consider BVPS very important to track for insurers and a metric that sheds light on business quality. While other (and more commonly known) per-share metrics like EPS can sometimes be lumpy due to reserve releases or one-time items and can be managed or skewed while still following accounting rules, BVPS reflects long-term capital growth and is harder to manipulate.

To investors’ benefit, Corebridge Financial’s BVPS grew at a solid 16.8% annual clip over the last two years.

The debt-to-equity ratio is a widely used measure to assess a company's balance sheet health. A higher ratio means that a business aggressively financed its growth with debt. This can result in higher earnings (if the borrowed funds are invested profitably) but also increases risk.

If debt levels are too high, there could be difficulties in meeting obligations, especially during economic downturns or periods of rising interest rates if the debt has variable-rate payments.

Corebridge Financial currently has $18.91 billion of debt and $12.3 billion of shareholder's equity on its balance sheet, and over the past four quarters, has averaged a debt-to-equity ratio of 1.2×. We think this is dangerous - for an insurance business, anything above 1.0× raises red flags.

Return on equity (ROE) is a crucial yardstick for insurance companies, measuring their ability to generate returns on the capital provided by shareholders. Insurers that consistently deliver superior ROE tend to create more value for their investors over time through strategic capital allocation and shareholder-friendly policies.

Over the last five years, Corebridge Financial has averaged an ROE of 21.6%, exceptional for a company operating in a sector where the average shakes out around 12.5% and those putting up 20%+ are greatly admired. This is a bright spot for Corebridge Financial.

We were impressed by how significantly Corebridge Financial blew past analysts’ revenue expectations this quarter. We were also glad its EPS outperformed Wall Street’s estimates. Zooming out, we think this was a solid print. The stock remained flat at $34.79 immediately after reporting.

Updated: October 23, 2025 at 12:14 AM EDT

Before investing in or passing on Corebridge Financial, we urge you to understand the company’s business quality (or lack thereof), valuation, and the latest quarterly results - in that order.

Corebridge Financial isn’t a terrible business, but it doesn’t pass our bar. First off, its revenue growth was weak over the last five years, and analysts expect its demand to deteriorate over the next 12 months. And while its stellar ROE suggests it has been a well-run company historically, the downside is its projected EPS for the next year is lacking. On top of that, its declining pre-tax profit margin shows the business has become less efficient.

Corebridge Financial’s P/B ratio based on the next 12 months is 1.3x. This valuation multiple is fair, but we don’t have much faith in the company. We're pretty confident there are more exciting stocks to buy at the moment.

Wall Street analysts have a consensus one-year price target of $39.85 on the company (compared to the current share price of $32).

Although the price target is bullish, readers should exercise caution because analysts tend to be overly optimistic. The firms they work for, often big banks, have relationships with companies that extend into fundraising, M&A advisory, and other rewarding business lines. As a result, they typically hesitate to say bad things for fear they will lose out. We at StockStory do not suffer from such conflicts of interest, so we’ll always tell it like it is.