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Brighthouse Financial (Nasdaq: BHF) | Company Profile, History, Competitors

 

Brighthouse Financial (NASDAQ: BHF) is the former US retail life and retirement insurance business of MetLife. It was spun out of MetLife in 2017 and headquartered in Charlotte, NC. Brighthouse had $224 billion in total assets at end of 2017.

Brighthouse provides annuity and life insurance products through independent distribution channels. On August 4, 2017, BrightHouse Financial began trading as a separate public company under BHF on the Nasdaq Stock Exchange.

Business Segments

Brighthouse has four main operating segments:
  • Annuities (52% 2017 Revenues): Provides annuity products to retail clients through its distribution network
  • Run-off (25% of 2017 Revenues): Legacy businesses which are no longer sold.
  • Life (16% of 2017 Revenues): Provides universal, term, variable and whole life insurance policies through its distribution network.
  • Corporate (7% of 2017 Revenues): Businesses not in the above main operating segments.

Annuities Segment

Brighthouse provides annuity products including variable, fixed, index-linked and income annuities. These products are sold exclusively through third-party distributors. Brighthouse earns spreads on fixed annuities and asset management fees on variable annuities.

Total Annuity Liabilities (2017)
  • Variable Annuities: 83%
  • Fixed Deferred Annuities: 9%
  • Shield Annuities: 3%
  • income Annuities: 5%
Variable annuities represents the majority of Brighthouse's annuities portfolio. MetLife introduced its variable annuity product over 50 years ago. MetLife introduced Guaranteed Minimum Income (GMIB) riders in 2001. These riders provide customers for their lifetime guaranteed annuity payments after a specified period of time. Given the minimum guaranteed value, reserves required for GMIBs tend to be higher. Due to this risk, in 2016, MetLife suspended selling of annuity agreements with GMIB riders. Instead, MetLife began selling Guaranteed Minimum Withdrawal Benefit (GMWB) riders and Shield Level Selector products. GMWB riders provide customers the right to withdraw a maximum percentage of their initial investment each year. Shield Level Selector products is an index-linked annuity that provides contract holders with some market downside protection.

Run-off Segment

This segment consist of legacy businesses which are no longer sold. This includes structured settlement, bank-owned life insurance and universal life with secondary guarantees. 

Life Insurance Segment

Brighthouse provides universal, term, variable and whole life insurance policies to retail clients. Brighthouse offers the products through its distribution network.

Corporate & Other Segment

Brighthouse's business lines not in the main operating segments. These includes long term care and workers compensation business, and term life insurance sold directly to customers, which is not currently being sold.

Risks

Insurance business is sensitive to interest rates and equity markets. Variable annuities business may depend on reaching certain investment returns.

Regulatory rules may cause reserve requirements to increase.

Management

Eric Steigerwalt (CEO): Eric Steigerwalt serves as CEO since 2012. He has served in various roles at MetLife including CFO and Treasurer for MetLife's US business. 

Anant Bhalla (CFO): Anant Bhalla serves as CFO since 2016. Prior, he served as Senior Vice President and Chief Risk Officer in the Global Consumer business at American International Group. He has also worked at Ameriprise Financial and American Express.

Financials

 $ USD in millions   
 2014  2015  2016  2017
 Book  Value

 $4,612   $4,528   $5,068   $4,747 
 Net Premium Earned
$1,500  $1,679  $1,222  $863 
 Operating Income (EBIT)
$1,167   $1,326   $1,072   ($165)
 Net Income
$1,159  $1,119  ($2,939) ($378)
 EPS
($3.16)

Brighthouse Financial
 
  Ticker     NASDAQ: BHF
  Industry Insurance
  Founded 2017
  Headquarters Charlotte, NC
  Assets $224bn (2017)
  Revenues
$4.7bn (2017)
  Employees 1,260 (2017)
  Website brighthouse
financial.com