FG

F&G is a fast-growing annuity writer benefiting from the demographic tailwind management itself flags — 11,000 Americans turning 65 every day and a projected 30% increase in the 65-100 cohort over 25 years. Total assets jumped to $98.4B (+15.9% YoY) as the company scaled its fixed and indexed annuity book, and stockholders' equity grew 21.6% to $4.80B. At 0.6x sales and 14.1x trailing EPS the headline multiples look undemanding for an insurer riding that wave.

But the 2025 earnings line is the problem. Net income fell 58.5% to $265M and diluted EPS dropped 61.5% to $1.88 even as revenue was essentially flat at $5.73B — meaning the deterioration is margin/reserve-driven, not a top-line miss. Net margin compressed to 4.6% and ROE to just 5.5%, well below an insurer's cost of equity. The MD&A frames the cause directly: products carry guaranteed minimum crediting rates (4.84% average on $6.4B of fixed-rate annuity reserves, up from 4.42%) that F&G must pay 'even if earnings on our investment portfolio decline.' The Risk Factors disclosure of MRB and Contractholder Funds exposure to 'equity price volatility' and interest rate movements points to the same mark-to-market mechanics that whipsawed earnings in 2023 (a -$58M loss year).