Fidelity & Guaranty Life (NYSE:FGL) Q3 2018 Earnings Conference Call - Final Transcript

Nov 08, 2018 • 09:00 am ET


Fidelity & Guaranty Life (NYSE:FGL) Q3 2018 Earnings Conference Call - Final Transcript


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Good morning, and welcome to the FGL Holdings Third Quarter 2018 Earnings Conference Call and Webcast. All participants are in a listen-only mode. (Operator Instructions) Please note this event is being recorded.

I would now like to turn the conference over to Diana Hickert-Hill, SVP of Marketing, IR and Communications. Please go ahead.

Diana Hickert-Hill

Thank you, operator, and good morning, everyone. We appreciate you joining our earnings call. Today, we will discuss our financial results for the third quarter of 2018, which ended on September 30. You can find the financial information for FGL Holdings on the Investors section of our website Today's presenters include Chris Littlefield, President and CEO; and Dennis Vigneau, EVP and CFO.

(Forward-Looking Cautionary Statements)

During this conference call, we may refer to non-GAAP financial measures that we believe may be meaningful to investors. Please refer to our third quarter earnings release, financial supplement and investor presentation that we posted to our website. These documents contain a reconciliation of non-GAAP financial measures to GAAP. And finally, all comparison comments today will be to the third quarter of 2017 unless we state otherwise.

I will now turn the call over to Chris.

Christopher Littlefield

Thank you, Diana and good morning everyone. Before I talk about our third quarter results, I wanted to take a couple of minutes to report on how we're progressing against the strategic initiative and priorities we outlined at our Investor Day earlier this year.

First, as you know, one of our top priorities has been to work on securing ratings upgrades, which would accelerate organic growth and provide us with greater strategic flexibility. You may remember that A.M. Best raised our outlook on our rating from stable to positive in March, and we've been cautiously optimistic that we can secure an upgrade by the end of the year. At this time, we do not believe the upgrade will occur this year, but remain optimistic that we'll secure an upgrade to A minus in 2019 after we file our full-year 2018 statutory financials.

Second, we stated that we're focused on driving profitable organic growth in our existing businesses. I'll go through our detailed top line results in a minute, but it's clear we've made great progress on this objective. Most importantly, we explained that we would continue to be disciplined in writing new business at or above our return targets. And I'm pleased to report our sales this year have exceeded our new business profitability targets.

Third, we believe that by partnering with Blackstone on investment management, we'd be able to leverage their world-class originations, structuring and underwriting abilities to execute our portfolio rotation. Today, we're focused on reducing corporate bond holdings, which are largely BBB rated in favor of investment-grade structured securities sourced by Blackstone. 2018 is a transitional year and there is no doubt that when completed, this repositioning will be accretive to portfolio yields and net investment income, while improving diversification and the overall risk profile. Dennis will go into more details on the