Brighthouse Financial Q3 2023 Earnings Call Transcript

There are 14 speakers on the call.

Operator

Morning, ladies and gentlemen, and welcome to Brighthouse Financial's Third Quarter 2023 Earnings Conference Call. My name is Justin, and I will be your coordinator today. At this time, all participants are in a listen only mode. We will facilitate a question and answer session towards the end of the conference. In fairness to all participants, please limit yourself to one question and one follow-up.

Operator

As a reminder, the conference is being recorded for replay purposes. I would like to turn the presentation over to Dana Amanti, Head of Investor Relations. Ms. Amanti, you may proceed.

Speaker 1

Thank you, and good morning. Welcome to Brighthouse Financial's Q3 2023 earnings call. Materials for today's call were released last night and can be found on the Investor Relations section of our website. We encourage you to review all of these materials. Today, you will hear from Eric Stegherwalt, our President and Chief Executive Officer and Ed Spihar, our Chief Financial Officer.

Speaker 1

Following our prepared remarks,

Speaker 2

We will open

Speaker 1

the call up for a question and answer period. Also here with us today to participate in the discussions are Myles Lambert, our Chief Distribution and Marketing Officer David Rosenbaum, Head of Product and Underwriting and John Rosenthal, our Chief Investment Officer. Before we begin, I'd like to note that our discussion during this call may include forward looking statements within the meaning of the federal securities laws. Brighthouse Financial's actual results may differ materially from the results anticipated in the forward looking statements as a result of risks And uncertainties described from time to time in Brighthouse Financial's filings with the SEC. Information discussed On today's call speaks only as of today, November 8, 2023.

Speaker 1

The company undertakes no obligation to update any information discussed on today's call. During this call, we will be discussing certain financial measures that are not based on generally accepted accounting principles, also known as non GAAP measures. Reconciliation of these non GAAP measures on a historical basis to the most directly comparable GAAP measures and related definitions may be found in our earnings release, And finally, references to our statutory results, including certain statutory based measures used by management are preliminary due to the timing of the filing of the statutory statements. And now, I'll turn the call over to our CEO, Eric Stegherwalt.

Speaker 3

Thank you, Dana, and good morning, everyone. Brighthouse Financial reported solid results for the Q3 of 2023 That reflect the steady execution of our focused strategy. We continue to manage through this volatile market environment, One in which we saw equity markets fall modestly, while interest rates rose significantly, increasing by more than 70 basis points in the Q3 of 2023 as measured by the 10 year U. S. Treasury.

Speaker 3

As I've said before, While we have a cautious view on both the current market and economic environment, we intend to maintain an active and opportunistic Share repurchase program and we remain committed to returning capital to our shareholders over time. Year to date through November 3rd, We repurchased approximately $216,000,000 of our common stock, which included $64,000,000 of common stock Repurchased in the Q3. In addition to our share repurchase program, we remain focused on the steady execution of our business strategy, along with our multi year, multi scenario financial management framework and risk management strategy. Turning to the results in the quarter. I am pleased with our sales results in the Q3.

Speaker 3

Our annuity sales totaled $2,600,000,000 Which is a 5% increase sequentially. Sales results in the quarter were largely driven by persistent Strong sales of our flagship shield level annuities, which increased 15% sequentially, as well as with sales of our fixed deferred annuities. As one of the top annuity providers in the United States, we continue to leverage the depth And breadth of our expertise, along with our strong distribution relationships to competitively position ourselves in markets we choose to compete in. We remain focused on offering a diversified portfolio of complementary products to further drive the addition of high quality new business to our in force book and we remain pleased with the progress that we continue to make towards shifting our business mix over time. Additionally, we reported $25,000,000 in sales of our life insurance products in the Q3 of 2023, Consistent with Life sales results in the Q2 of 2023, which continue to be mainly driven by our SmartCare product.

Speaker 3

We remain focused on maintaining the competitiveness of our life insurance products as we execute our life insurance strategy. Turning to financial results. Our combined risk based capital or RBC ratio was estimated to be between 400% and 4 20%. And cash and liquid assets at the holding company remain robust at $900,000,000 as of September 30. Additionally, we had solid GAAP results as our adjusted earnings less notable items were generally in line with our expectations And we continue to effectively manage our expenses.

Speaker 3

In summary, we reported solid results in the Q3 of 2023. Our statutory balance sheet and liquidity metrics were strong. Our sales results remained at a high level and we continue to deliver on our commitment to return capital to shareholders. We are confident in our strategy and are unwavering in our focus on business growth and Prudent Financial Management. With that, I'll turn the call over to Ed to discuss our Q3 financial results in more detail.

Speaker 4

Thank you, Eric, and good morning, everyone. Last night, we reported 3rd quarter earnings along with preliminary statutory results. Beginning with the preliminary statutory metrics, our statutory combined total adjusted capital or TAC was $7,300,000,000 at September 30, which compares with $7,600,000,000 as of the end of the second quarter. Our estimated combined risk based capital or RBC ratio Was between 400% and 4 20% as of the end of the third quarter, which was down from a range of 4 30% to 4 50% as of the end of the second quarter. Changes in interest rates and our deferred tax asset were key drivers of the decline in TAC and the RBC ratio.

Speaker 4

In addition, capital requirements associated with new business growth contributed to a reduction in the RBC ratio with an impact consistent with what we have discussed in the past. Interest rates rose significantly in the quarter, Which drove losses on interest rate hedges. As we discussed on our long term statutory free cash flow projections call in September, A key element of our interest rate risk management strategy is balancing the immediate impact From gains and losses on hedging instruments relative to the multi year impact from interest rates on our statutory balance sheet. We believe this approach to risk management results in a balance sheet that is substantially protected from movements in interest rates. To illustrate, given where interest rates are today, we anticipate that essentially all of the negative impact On variable annuity or VA risk management results in the Q3 associated with higher long term interest rates We'll be recouped by an incremental benefit in the Q1 of 2024 associated with Prescribed valuation interest rate for our VA book of business.

Speaker 4

This so called mean reversion point or MRP Is anticipated to increase by 50 basis points based on current interest rates, which compares with an expected 25 basis point increase based on rate levels at the end of June of this year. The second driver of the change in our capital metrics With a reduction in admitted deferred tax assets or DTAs. As I have said in the past, The statutory accounting for the deferred tax asset is conservative. The admitted DTA on our statutory balance sheet is now only $100,000,000 or a small fraction of our total tax attributes, which we still anticipate using over the long term. I would also like to note that the internal reinsurance transaction between Brighthouse Life Insurance Company and its New York affiliate Was effective in October.

Speaker 4

As I mentioned on our 2nd quarter earnings call, we expect an approximately $200,000,000 benefit to TAC in the Q4 as a result of the capital efficiencies created by this transaction. As Eric mentioned, Our liquidity remains robust with holding company liquid assets of $900,000,000 at September 30, consistent with June 30. Additionally, we still anticipate taking at least $300,000,000 of ordinary subsidiary dividends to the holding company this year. Now turning to adjusted earnings results in the Q3. Adjusted earnings excluding the impact from notable items We're $275,000,000 which compares with adjusted earnings on the same basis of $271,000,000 in the Q2 of 2023 and $74,000,000 in the Q3 of 2022.

Speaker 4

The notable items in the quarter We're primarily related to the annual actuarial assumption review and had a net favorable impact on adjusted earnings of $51,000,000 after tax. This is our first annual assumption review under the new GAAP accounting framework. As part of this assumption review, we increased our assumed GAAP long term mean reversion rate for the 10 year U. S. Treasury to 3.75 percent from 3.5%.

Speaker 4

We continue to assume that mean reversion occurs over 10 years. The increase in our long term interest rate assumption drove a benefit to adjusted earnings within our universal life with secondary guarantees for ULSG Block of Business. Along with a review of capital market assumptions, we also reviewed emerging experience and model assumptions. The interest rate related benefit to total adjusted earnings was partially offset by policyholder behavior assumption updates in the Life and Annuity segments. I will note that updates related to mortality and lapse assumptions for our ULSG block of business were insignificant.

Speaker 4

Excluding the impact of notable items, The adjusted earnings results in the Q3 were roughly in line with our quarterly run rate expectation. Alternative investment income was approximately $30,000,000 or $0.45 per share below our quarterly run rate expectation As the alternative investment yield was 1.6% in the 3rd quarter. This was offset by a higher underwriting margin and lower expenses. The underwriting margin was higher than our quarterly run rate expectation driven by overall lower claims experience. There is variability in the underwriting margin throughout the year driven by fluctuations in volume and severity of claims along with the offset from reinsurance.

Speaker 4

In the Q3, the Life segment experienced some larger claims. However, this was more than offset by favorable overall claims experience, including the reinsurance offset within the ULSG business. Additionally, corporate expenses were lower than our run rate expectation in the Q3. Turning to the segment results. The Annuity segment reported adjusted earnings excluding notable items of $291,000,000 in the 3rd quarter.

Speaker 4

On a sequential basis, annuity results were primarily driven by higher net investment income and lower expenses, offset by lower fees. The Life segment reported an adjusted loss excluding notable items of $2,000,000 Sequentially, results were driven by a lower underwriting margin. The Runoff segment reported adjusted earnings of $1,000,000 excluding notable items. Sequentially results reflect the higher underwriting margin partially offset by lower net investment income. Corporate and other had an adjusted loss excluding notable items of $15,000,000 On a sequential basis, Results were driven by lower expenses.

Speaker 4

Overall, we reported solid third quarter results, maintained our target capitalization And our holding company liquidity remained robust. We continue to manage the company under a multi year, multi scenario framework to support and protect our distribution franchise. With that, we would like to turn the call over to the operator for your questions.

Operator

And thank you. And our first question comes from Alex Scott from Goldman Sachs. Your line is now open.

Speaker 5

Hi, good morning. First question I have for you all was just on the GAAP Assumption review and the impact on market risk benefits. I wanted to find out, are there any statutory implications of some of the things The change in the market risk benefits and also if you could provide any clarity on what those changes were?

Speaker 4

Yes. Good morning, Alex. So first I'd start off with the assumption update was a modest impact. So when we look at GAAP, we had we talked about a notable item of $51,000,000 for adjusted earnings and said that that was mostly related to the actuarial assumption review. And that was driven by the change in our mean reversion assumption for the 10 year treasury.

Speaker 4

So 350,000,000 going to 375,000,000 was the driver of the overall impact from our assumption update. The other thing I would say is again it is a very small number on a GAAP basis if you think about that relative to a GAAP balance sheet of north of $220,000,000,000 And the fact that we are reviewing all of our important assumptions underlying that $220,000,000,000 balance sheet. And then the final point, which gets to the question on stat, the assumption update had no real impact on our

Speaker 6

statutory Risk based capital ratio.

Speaker 5

Got it. That's helpful. Second question I had is just on transactional opportunities. You mentioned the one that I think is bringing up $200,000,000 That was internal if I recall. Are there any additional internal or external opportunities that you all could leverage?

Speaker 4

Well, as you can imagine, we're always considering what makes sense for us To do, there's nothing else for us to talk about at this point other than the transaction that you referenced.

Speaker 5

Okay. Thank you.

Operator

And thank you. And one moment for our next question. And our next question comes from Alex Scott from Goldman Sachs. Your line is now open.

Speaker 5

I just asked, so I'm good. Thank you.

Operator

I'm sorry about that. One moment for our next question. And our next question comes from Tracy Banguine from Barclays. Your line is now open.

Speaker 7

Thank you. Good morning. So you talked about RBC and tax declining because of your interest rate hedging losses. I'm wondering if you could share a sensitivity analysis of RBC to rise of interest rates, maybe by 50 basis point incrementals?

Speaker 6

Hi, Tracy. It's Ed.

Speaker 4

So I would say We're not going to give that sensitivity other than to say you can look what happened in this quarter, you could look at what rates did. Now that's It's an oversimplification for you to look at any one rate. I mean, it's also movement in the shape of the yield curve is going to have an impact. So I think the key point here though and it's consistent with what I had discussed on our statutory free cash long term statutory free cash flow call A couple of months ago, we are now in a position where we have a substantially hedged out position for interest rates. And the way that we define that is we consider what is the trade off between the immediate impact on gains and losses associated with our hedging portfolio versus the multi year impact that we will get on our statutory balance sheet driven by the mean reversion point change.

Speaker 4

This quarter, it was a very clean Relationship, I would say, in that the amount of the impact that we had that was negative in the 3rd quarter Is expected to fully reverse in the Q1 of next year.

Speaker 7

Got it. You also talked about the statutory reversion, the main next year will increase by 50 basis points. How many points of RBC

Speaker 4

We said in the past that A 25 basis point increase in the mean reversion point is $200,000,000 to $250,000,000 positive. And so I've also cautioned you about linear assumptions, but it's probably reasonable to be in that range if you think about Each of those 25 point increments that we would see at the beginning of next year based on where rates ended the Q3.

Speaker 7

Okay. Last, I'm not really getting why you're seeing mixed mortality experience favorable in runoff or unfavorable in life. What made each segment unique this quarter?

Speaker 4

Yes. I would say that mortality experience as we've said consistently will bounce around from quarter to quarter. And so, I think you can have adverse mortality in one area and favorable results in another. I mean, we have a reinsurance Offset that we've talked about in the past, that may be more beneficial in one segment than it is in another, for example. So I don't think you can simplify it down to say if you have favorable mortality, you're going to have favorable mortality across all your segments.

Speaker 4

And clearly, that's not the case because that's not what we saw this quarter. So I think the most important point would be that Mortality overall for us in the quarter was slightly favorable.

Speaker 7

You mentioned reinsurance. Was there anything with reinsurance recoverability that Was different this quarter?

Speaker 4

It was more favorable, than I would say the typical quarter.

Speaker 8

Thank you.

Operator

And thank you. And One moment for our next question. And our next question comes from Ryan Krueger from KBW. Your line is now open.

Speaker 8

Hey, thanks. Good morning. I guess, question for Ed. In terms of the Some timing disconnect between the immediate impact of rate hedges and then the economic scenario generator. I guess, I think another option is to use a clearly defined hedging strategy that would be a little more using forward rates in statutory Service for bearable annuities, is that something that you would consider switching to given the increased interest rate hedging protection that you now have?

Speaker 4

Hey, Ryan. Good morning. Yes, I don't really understand That comment because I'm not sure how there is the linkage between a CDHS and somehow using a different framework for statutory reserve calculation Then the generator and the mean reversion points.

Speaker 8

Okay. Yes, I think My understanding is that some companies use implicit CVHS and it seems to somewhat override the economic scenario generator, but that could be mistaken. And then just on the in terms of the internal reinsurance transaction, so the RBC impact of that would be Is that about 10 points benefit to RBC?

Speaker 4

I mean, it's roughly that.

Speaker 8

Okay, got it. Thank you.

Operator

And thank you. And our next question comes from Elyse Greenspan from Wells Fargo. Your line is now open.

Speaker 9

Thanks. Good morning. My first question was on, I guess, sales. Shield sales Trended up in the quarter, and then within annuities, fixed annuity sales did trend down after growing In the 1st part of this year, so just looking for some incremental color on what you're seeing in the sales side within annuities.

Speaker 2

Hey, good morning, Elyse. It's Miles. I'm happy to take that one. So first, I'll start with Shield. What I would say is, it's a much better environment for Shield sales than it was this time last year.

Speaker 2

Consumers are looking to get back into the market with some level of protection. So, Shield obviously Plays very well in that market. Look, we have a competitive product. We have a very strong distribution franchise And we continue to evolve our product portfolio. Last year, we introduced Shield Level Pay Plus and this year, we introduced a new strategy on our Shield Product called SeparateEdge and all those factors are helping us to drive sales.

Speaker 2

As it relates to, FRA sales, We're very pleased with our level of FRA sales right now. Again, we have a competitive product with a strong distribution franchise for that Product category as well. And we gave guidance earlier this year. We expected FRA sales to be down after a record year last year. And frankly, what we're starting to see is some of those flows shifting back to our Shield product and we're quite pleased with that.

Speaker 9

Thank you. And then, Ed, do you have a sense just on VII, where Q4 Could trend relative to normal levels?

Speaker 10

Elyse, this is John. I don't think we want to get in the habit of predicting near term Alternative returns, it's generally a losing proposition. But having said that, if you think about The negative equity returns in Q3 and the lag nature of reporting, it would not be unreasonable to Suggest that next quarter's return is going to be below the midpoint of our long term expectations.

Speaker 9

Okay. Thank you.

Operator

And thank you. And one moment for our next question. And our next question comes from Tom Gallagher from Evercore ISI. Your line is now open.

Speaker 6

Good morning. Ed, just a question. How on the DTA that you mentioned there was a write Down and there's only $100,000,000 on the balance sheet that's an admitted asset now. How much is the off balance sheet unadmitted DTA at this point? And can you help us think through the scenario under which you would be able to put that back on the balance sheet?

Speaker 6

I assume Very positive earnings over time would do it, but any color on that?

Speaker 4

Hey, good morning, Tom. So the tax benefit is I believe it's around $1,500,000,000 right now. So it's a very large number relative to what gets reflected on our balance sheet. I think the important point is when you look at the cash flows that we put out, The 10 year view, we are assuming that we are using those tax attributes. So the fact that they're not on the balance sheet today Does not mean that we don't expect that over this long term period of time that we will use those attributes.

Speaker 6

Got you. Yes, I was thinking more from In overall RBC perspective, how big of a negative adjustment that is right now and How that could like replenish or build excess capital over time. But I hear you on the So essentially the net present value of it is a much higher number than $100,000,000 Is that fair based on what you were just describing? I would say absolutely. Okay.

Speaker 6

And then second question just on I know you guys have had a bunch of reinsurance rate increases that were either pushed through or you did a recapture. Is that pretty much over or do you have any more in the pipeline?

Speaker 4

I think it would be difficult to say that it's over, But we have had recaptures over time, you're right. And I would think that it's possible that could happen in the future, but I don't see anything to give you a preview of at this point.

Speaker 6

Okay. And then if I could slip in one final one. Can you on the balance sheet review, I think we can all agree that a modest positive under the new accounting framework As a relief for anyone, can you give some quantification for what the gross Benefit was for the 25 basis point interest rate change. Was that a big number or is that also fairly modest, if you were to just isolate that part of it?

Speaker 4

Sorry, Tom, can you repeat isolate the part associated with?

Speaker 6

Sure. The 25 basis point increase in long term interest rate assumptions, if you were to isolate because you mentioned there were some Offsetting negatives for policyholder behavior on life and annuities. I just want to get a sense for the quantum of The 25 basis point favorable item and how much that had no other adjustments been taken, are you able to give Some dimension of how big of an impact. Okay. Thanks.

Speaker 4

Yes. That impact was in the Runoff segment And it was more than the total benefit that you saw in runoff. So the runoff was, I think it was $94,000,000 After tax, so you can assume that the rate impact was more than that. Now the other thing I would just point out because I think this has come up in the past. There was no change of any substance In our laps assumptions for ULSG, which resides in the Runoff segment.

Speaker 4

And when I say no change, I'm considering Like $20,000,000 on a $9,000,000,000 block of business. So it was insignificant.

Speaker 6

Got you. That's helpful. Thanks.

Operator

And our next question comes from Suneet Kamath from Jefferies. Your line is now open.

Speaker 11

Thanks. Good morning. So just To come

Speaker 4

back to RBC just to make

Speaker 11

sure I have the numbers right. So we should be thinking about $200,000,000 sort of good guide attack in 4Q from reinsurance and then I think you mentioned $300,000,000 assuming a reversal for 1Q from the mean reversion parameters. So I And then relatedly, is that mean reversion parameter interest rate assumption sort of locked in at this point? Like Do you guys know what that is or is it still being calculated?

Speaker 4

Hey, good morning, Suneet. So a few questions in there. So It is not locked in because we have to wait to see what the month end rates are for November December. But I can tell you that we would get it based on where rates are today even after having come down from where they were at the end of 3rd quarter. So, there's a reasonable amount of cushion between rates where rates are today for the 20 year and where they would need to go to in the last 2 months for us to still get it.

Speaker 4

I would point out that if for some reason rates dropped a lot and we did not get that incremental, We would also have some meaningful hedge gains in our portfolio. So what you saw happened in the Q3, you'd see kind of the opposite occur in the Q4. So that's a key point to make, I think. Just generally about the ins and outs, first of all, I would say that I was saying for 50 basis points next year on the mean reversion point, I would be assuming something north of $400,000,000 I thought you might have just said $300,000,000 but it was something North of 400, maybe I just misheard you. The other thing I'd say sorry.

Speaker 11

No, go ahead. No, go ahead. You're right. Keep going.

Speaker 4

Okay. So the other thing I'd say about the RBC ratio, right, we talk about our RBC ratio target in normal markets. And obviously, what you had occur in the Q3, I would suggest is not a normal market with the 10 year treasury yield up 70 or 80 basis points. I mean, I think if you look at history that would be considered somewhat of a low very low probability event. And obviously, we had the impact on the hedge portfolio as a result.

Speaker 4

Just generally though, when we think about our RBC target, Right. There are a few things that we would consider, right? We think about our position from a hedging standpoint. I would argue that we are in a much better position today From a hedging risk management standpoint, then where we were at separation. We as you know, we derisked the equity hedging Position, de risk the equity hedge risk back in late 2019, 2020.

Speaker 4

We Made a significant change in the risk profile and interest rates in 2022. And so That makes us think about our capitalization a little differently. The mix shift obviously is a big one. As we continue to move toward a lower risk company, I think you could assume over time that there's an argument to be made for potentially having a lower RBC ratio. Another consideration and I'm bringing these up because obviously we're talking about now an RBC ratio where we gave you a range of $400,000,000 to $420,000,000 You see some of the ins and outs in the 4th quarter, North of a $300,000,000 dividend is our expectation and $200,000,000 Positive from the reinsurance, right?

Speaker 4

And you see where we're starting from. So I'm just giving you some context here. First of all, it's we're managing this over a multi year, multi scenario framework. We think we have a de risk balance sheet from a hedging standpoint. We continue to see a mix shift that would suggest Lower not higher capital requirements over time.

Speaker 4

Another factor to consider is depending on the scenarios that you are in or the environment that You might have more of your risk reflected in reserves than capital. And while there is A mechanism that helps to neutralize the RBC impact from that, it's not perfect for a company that's not a pure VA company. So to the extent you had more of your risk reflected in reserves, you could argue that you would have to hold less capital and vice versa. And then the final thing you have to consider, I mean, we didn't get any questions on it today, but obviously it's very important to talk about is the holding company position And not just the fact that we've got $900,000,000 of cash, but that we also have a reasonable level of debt and that we have that debt termed out long term given the actions we took when rates were low. So these are all things to think about when you're looking at Our RBC ratio.

Speaker 11

Got it. Okay, that's helpful. Maybe just switching gears, Just curious if you guys have any initial thoughts on the DOL proposal that came out, I guess, it was last week?

Speaker 3

Hey, Suneet, it's Eric. As you've heard others say, it's over 500 pages. It's pretty complicated. We've been pretty thoughtful about this stuff, if we think it can affect Brighthouse in the past, and I'll be thoughtful here. We don't know where this is going to end up, but there could be consumer and business impacts, if this proposal is finalized.

Speaker 3

I don't know what's actually going to happen. The trade groups are all over this, as I'm sure you know. I'm on the Board of the ACLI. Myles is on the Board of IRI. They do a fantastic job in these situations, and them and numerous groups are already opposing this regulation Similar to 2016.

Speaker 3

So, we'll learn more. We'll understand the framework better here in the coming weeks months, But that's sort of an initial reaction.

Speaker 11

Okay, thanks.

Operator

And thank you. And our next question comes from John Barnidge from Piper Sandler. Your line is now open.

Speaker 12

Good morning. Appreciate the opportunity. Thank you very much. A few quarters ago, you had talked about the Outflows and what you kind of expected versus surrender activity had led it to be slightly higher than that. Are you in a position to maybe update those comments today based on the experience you've had so far in 2023?

Speaker 12

Thank you.

Speaker 13

Hey, John. Good morning. This is David. So I think you're right in your comments that in the Q1, We talked about based on our expectation for this year based on where interest rates were and are And the timing of business coming out of surrender that we expected flows to be higher or outflows to be higher than what we have seen historically. And that is playing out and really in line with our pricing assumptions.

Speaker 13

So I think those comments Still do hold. Miles talked a little bit about sales. So when you think about outflows in the quarter, Surrenders were up on Shield, but if you think about the offset or the impact from higher sales, net flows from a VA and a Shield We're flat essentially flat sequentially. Myles talked also about fixed sales, which were down sequentially And you saw an uptick in fixed flows. Now they've been elevated this year relative to where they were last year.

Speaker 13

And just as an example of the business coming out of surrender, you may remember in 2020, we sold A meaningful amount of fixed rate annuity business and that business, the 3 year portion of that business is up for surrender and we saw an impact of that in the Q3 and expect to see an impact of that also in the Q4.

Speaker 12

It's very helpful. Thank you. And then my follow-up question sticking with annuities and maybe on distribution. If I look at like Shield as a percent of total VA or Shield as a percent of overall sales, it's 92% of VA sales, 70% of Overall sales roughly it looks like. Is that a high watermark or should we assume a Reasonable weighting to sales compensation in the near term for that?

Speaker 2

Hey, John, it's Miles. I'll take that. It's about in the range that we've seen in the past. It might be a little bit higher, but it's generally in the range on the higher end as we've seen it in the past.

Speaker 12

Great. Thank you very much for the answers.

Operator

And thank you. And I'm showing no further questions. I would now like to turn the call back over to Dana Almonte for closing remarks.

Speaker 1

Thank you, Justin and thank you everyone for joining the call today. Hope you have a great day.

Operator

This concludes today's conference call. Thanks for participating. You may now disconnect.

Earnings Conference Call
Brighthouse Financial Q3 2023
00:00 / 00:00