Equitable (EQH) 2024 KBW Insurance Conference summary

Review of financial targets and progress

• Set five-year targets: cash generation ($1.3B–$2B), payout ratio (60–70%), and EPS growth (12–15%).

• Free cash flow guidance for this year is $1.4–$1.5B, up 8–15% from last year.

• Payout ratio at 67%, at the high end of the target range.

• EPS growth reached 19% in the first half, tracking above the 12–15% target.

• Six of 20 quarters into the plan, momentum remains strong.

RILA and annuity market trends

• Annuity market grew from $250B to $400B, driven by demographics and higher rates.

• RILA sales benefit from retirees seeking equity exposure with downside protection.

• RILA market less sensitive to interest rates than fixed annuities; upside potential adjusts with market conditions.

• Top 10 players control 90% of RILA market; distribution is a key differentiator.

• RILA capital requirements are lower due to variable annuity chassis and conservative investment.

Traditional variable annuities and risk management

• Traditional VA sales have increased, but products now have floating rate guarantees and only passive funds.

• Guarantees are fully hedged, and pricing is conservative to ensure long-term sustainability.

• Less competition allows for conservative pricing and attractive returns.