F&G Annuities & Life Reports Third Quarter 2026 Results

F&G posts record AUM but adjusted earnings and ROE decline year-over-year.

What the company is saying

F&G Annuities & Life, Inc. (NYSE:FG) highlights record assets under management before reinsurance of $76.2 billion as of September 30, 2026, up 7% from the prior year, driven by record core retail sales of $2.1 billion in the quarter. The company emphasizes disciplined pricing, profitability, and a shift toward more fee-based, higher margin, and less capital-intensive business lines. CEO and President Conor Murphy frames the narrative as one of momentum, capital discipline, and strategic allocation to high-return opportunities. Management acknowledges that net earnings for the quarter were heavily influenced by $648 million in favorable mark-to-market effects, which are excluded from adjusted net earnings. The announcement stresses strong credit quality, with 97% of fixed maturities investment grade and credit-related impairments averaging 6 basis points over five years. F&G also points to capital returns, with $37 million distributed in Q3 and $232 million year-to-date through dividends and share repurchases. The tone is confident and growth-oriented, but the company does not dwell on the year-over-year decline in adjusted net earnings and return on equity.

What the data suggests

Net earnings attributable to common shareholders for Q3 2026 were $736 million, or $5.48 per diluted share, compared to $114 million, or $0.85 per share, in Q3 2025, but this was driven by $648 million in favorable mark-to-market effects. Adjusted net earnings, which exclude these effects, fell to $96 million ($0.74 per share) from $165 million ($1.22 per share) year-over-year. Assets under management before reinsurance reached a record $76.2 billion, up from $71.4 billion, with retained AUM at $56.2 billion. Gross sales were $3.0 billion, including $2.1 billion in record core retail sales, but net sales declined to $1.4 billion from $2.8 billion the prior year. Total equity attributable to common shareholders, excluding AOCI, rose to $6.7 billion ($51.37 per share), up $712 million ($5.44 per share) from June 30, 2026, primarily due to $652 million in market-related liability adjustments and a $297 million actuarial reserve release. Adjusted return on average equity, excluding AOCI, dropped to 6.7% from 8.8%, and adjusted return on assets fell to 0.69% from 0.87%. The company’s investment portfolio remains high quality, with 97% of fixed maturities investment grade and low, stable credit impairments. Capital returns to shareholders totaled $37 million in Q3 and $232 million year-to-date. The data show strong AUM and equity growth, but underlying profitability and returns have weakened compared to the prior year.

Analysis

The announcement is generally positive in tone and is supported by a comprehensive set of realised financial metrics, including net earnings, adjusted net earnings, AUM, book value, and capital returns. However, the management commentary contains several forward-looking statements about future growth, margin improvement, and business transformation that are not yet realised or quantified. While the company achieved record AUM and sales, adjusted net earnings and return on equity declined year-over-year, which is not highlighted in the narrative. The language around 'building momentum,' 'significant opportunities,' and 'progress toward a more fee-based, higher margin and less capital intensive business' inflates the signal relative to the actual mixed profitability trend. The majority of the key claims are realised and immediate, but the forward-looking commentary introduces moderate narrative inflation. There is no indication of a large capital outlay with deferred returns, and the financial disclosures are robust.

Risk flags

• ●Adjusted net earnings and return on equity both declined year-over-year, indicating that underlying profitability is weakening even as headline net earnings and AUM grow. This trend raises questions about the sustainability of earnings growth if mark-to-market gains do not recur.
• ●A significant portion of reported net earnings for the quarter ($648 million) comes from favorable mark-to-market effects, which are volatile and excluded from adjusted earnings. Heavy reliance on such non-operating items can mask core business performance and increase earnings volatility.
• ●Net sales and gross sales both declined year-over-year, with net sales dropping from $2.8 billion to $1.4 billion and gross sales from $4.2 billion to $3.0 billion. This contraction in sales volume could pressure future earnings if not offset by margin improvement or new business lines.
• ●The company’s narrative emphasizes a strategic shift toward fee-based and higher margin business, but the current period’s data do not show concrete margin expansion or improved profitability. If this transition does not deliver measurable results, future earnings and returns may remain under pressure.

Bottom line

F&G’s Q3 2026 results show record assets under management and equity growth, but adjusted net earnings and returns on equity and assets have declined from the prior year. The headline net earnings figure is inflated by large mark-to-market gains, while core profitability has weakened. Management’s strategy to shift toward fee-based, higher margin business is not yet reflected in improved adjusted earnings or margins. The company’s credit quality and capital return profile remain strong, but declining sales and profitability metrics present a risk if these trends persist. Investors should focus on whether future quarters deliver tangible improvements in adjusted earnings and returns, rather than relying on mark-to-market driven results. The most important takeaway is that while scale and capital strength are improving, underlying profitability is under pressure and needs to be monitored closely.

Announcement summary

(NYSE:FG) F&G Annuities & Life, Inc. reported financial results for the third quarter ended September 30, 2026. Net earnings attributable to common shareholders for the third quarter were $736 million, or $5.48 per diluted share, compared to $114 million, or $0.85 per share, for the third quarter of 2025. Net earnings for the third quarter included $648 million of net favorable mark-to-market effects and $8 million of other unfavorable items, all excluded from adjusted net earnings. Adjusted net earnings attributable to common shareholders for the third quarter were $96 million, or $0.74 per share, compared with $165 million, or $1.22 per share, for the third quarter of 2025. F&G achieved record assets under management (AUM) before reinsurance of $76.2 billion as of September 30, 2026, an increase of 7% over the third quarter of 2025, including retained AUM of $56.2 billion. Gross sales were $3.0 billion, including record core retail sales of $2.1 billion; net sales were $1.4 billion for the third quarter. The retained investment portfolio had 97% of fixed maturities rated investment grade, with credit-related impairments averaging 6 basis points over the past five years. Total F&G equity attributable to common shareholders, excluding AOCI, was $6.7 billion, or $51.37 per share, as of September 30, 2026, reflecting an increase of $712 million, or $5.44 per share, compared with June 30, 2026, primarily driven by $652 million of favorable market related liability adjustments, including $297 million of actuarial reserve release. F&G returned $37 million of capital to shareholders from common and preferred dividends in the third quarter, bringing the first nine months of 2026 capital returned to shareholders to $232 million, through $112 million of dividends and $120 million of share repurchases. For the nine months ended September 30, 2026, net earnings were $899 million, or $6.66 per share, compared to $124 million, or $0.94 per share, for the same period in 2025. Adjusted net earnings for the nine months were $291 million, or $2.20 per share, compared to $359 million, or $2.72 per share, for the same period in 2025. Book value per common share, excluding AOCI, was $51.37 as of September 30, 2026, up from $44.07 as of September 30, 2025. Adjusted return on average equity, excluding AOCI, was 6.7% for the third quarter and nine months ended September 30, 2026, compared to 8.8% for the same periods in 2025. Adjusted return on assets was 0.69% for the third quarter and nine months ended September 30, 2026, compared to 0.87% for the same periods in 2025. Conor Murphy, Chief Executive Officer and President, stated that F&G continued to build momentum in the third quarter, with record core retail sales driving assets under management before reinsurance to a record $76.2 billion, and emphasized the company's disciplined approach to pricing and profitability. Mr. Murphy also noted progress toward a more fee-based, higher margin, and less capital intensive business while growing the core spread-based franchise. The company will host a conference call to discuss third quarter 2026 results on November 6, 2026, at 9:00 a.m. Eastern Time.

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