Key Takeaways:
Brighthouse Financial Inc. (Nasdaq: BHF) reported a first-quarter net loss available to shareholders of $792 million, swinging from a profit on an adjusted basis, as market volatility drove significant derivative losses ahead of its pending acquisition.
The company attributed the GAAP loss volatility to differences between its hedging strategies and accounting rules for its annuity products. Adjusted earnings, which exclude these market-driven impacts, were $239 million, or $4.15 per diluted share, for the quarter ended March 31.
Total revenues for the quarter fell to $1.53 billion from $2.39 billion a year earlier. The decline was primarily caused by net derivative results swinging from a $311 million gain in Q1 2025 to a $509 million loss in Q1 2026. Annuity sales were $2.2 billion, while life insurance sales were $32 million.
The results come as Brighthouse prepares for an all-cash acquisition by an affiliate of Aquarian Capital LLC for $70.00 per share. The deal, valued at roughly $4.1 billion, was approved by stockholders in February and is expected to close in 2026, pending regulatory approvals.
The Annuities segment, the company's largest, remained profitable on an adjusted basis, reporting adjusted earnings of $324 million. This was driven by $1.9 billion in sales of its Shield Level Annuities. The Life segment posted an adjusted loss of $6 million, while the Run-off segment recorded a $48 million adjusted loss.
Brighthouse maintained a solid capital position, reporting an estimated combined risk-based capital (RBC) ratio of between 430 percent and 450 percent, at the upper end of its target range. The company ended the quarter with $5.0 billion in statutory combined total adjusted capital and $0.9 billion in holding company liquid assets.
The significant GAAP loss highlights the sensitivity of Brighthouse's business to market fluctuations, a factor likely to be managed differently once the company is taken private by Aquarian Capital. For current shareholders, the key metric remains the $70.00 per share cash buyout price, which provides a fixed exit value pending the deal's final closure later this year.
This article is for informational purposes only and does not constitute investment advice.
