Brighthouse Financial, Inc. (NASDAQ: BHFAL)

Brighthouse Financial is one of the largest providers of annuity and life insurance products in the U. S. with over 2.0 million annuity contracts and insurance policies in force at December 31, 2025. The company delivers its products through multiple independent distribution channels and marketing arrangements with a diverse network of distribution partners. It primarily transacts business through its insurance subsidiaries, Brighthouse Life Insurance Company, Brighthouse Life Insurance Company of NY and New England Life Insurance Company, though the latter does not currently write new business. Brighthouse Financial emphasizes independent distribution and offers a targeted set of products to serve customers and distribution partners, aiming to enhance its ability to invest in the business and distribute cash to shareholders over time. The company believes demographic trends in the U. S. population, increasing under-insured individuals, potential risks to governmental social safety net programs and the shifting of responsibility for retirement planning from employers to individuals will create opportunities to generate significant demand for its products. Risk management of both the in-force book and new business to enhance sustained long-term shareholder value is fundamental to its strategy.

Brighthouse Financial generates revenue primarily from premiums, universal life and investment-type product policy fees and other revenues related to its annuity and life insurance products. The company earns fees and charges on variable annuity contracts that invest through a separate account, including mortality and expense fees, administrative fees, investment management fees, 12b-1 fees, death benefit rider fees and living benefit rider fees. It also earns a spread on the portion of the account value allocated to the general account. Revenue is derived from the sale of variable, fixed, index-linked and income annuities, as well as term, universal, whole and variable life insurance products. The company serves individual customers seeking retirement savings, wealth accumulation, wealth transfer and income security, as well as financial security and protected wealth transfer through life insurance solutions.

The company operates through the following segments: Annuities; Life; Run-off; and Corporate & Other.

• The Annuities segment consists of a variety of variable, fixed, index-linked and income annuities designed to address contract holders’ needs for protected wealth accumulation on a tax-deferred basis, wealth transfer and income security. The segment includes Shield Annuities, fixed deferred annuities, income annuities and variable annuities with various guaranteed minimum death and living benefit riders. The company has shifted its business mix towards fixed products with lower guaranteed minimum crediting rates and variable annuities with less risky living benefits while increasing emphasis on index-linked annuity products. New sales since 2014 have primarily consisted of Shield Annuities, fixed annuities and variable annuities with simplified living benefits. The segment seeks to meet risk-adjusted return objectives through disciplined risk selection and innovative product design, balancing profitability with sales growth.

• The Life segment consists of insurance products, including term, universal, whole and variable life products designed to address policyholders’ needs for financial security and protected wealth transfer, which may be on a tax-advantaged basis. While the in-force book reflects a broad range of life products, the company is currently focused on universal life products with index-linked benefits, concentrating on design and profitability over volume. The segment aims to generate future revenue and profits from premiums, investment margins, expense margins, mortality margins, morbidity margins and surrender fees by managing the in-force book of business and focusing on efficiency to reduce the cost basis and underwriting expenses.

• The Run-off segment consists primarily of products that are no longer actively sold and are separately managed, including ULSG, structured settlements, pension risk transfer contracts, certain company-owned life insurance policies and certain funding agreements. The segment is managed separately from active sales businesses to allow for distinct oversight and risk management of legacy products.

• The Corporate & Other segment consists of activities related to funding agreements associated with the institutional spread margin business, excess capital not allocated to the other segments, interest expense related to outstanding debt, and preferred stock dividends, as well as expenses associated with certain legal proceedings and income tax audit issues. It also includes long-term care business reinsured through 100% quota share reinsurance agreements.

Brighthouse Financial believes it is a financially disciplined company with an emphasis on independent distribution. The company competes in very competitive annuities and life insurance markets with many participants and no single company dominating the market for all products. It competes with major well-established stock and mutual life insurance companies and non-insurance financial services companies such as banks, private equity firms, broker-dealers and asset managers. The Annuities segment also faces competition from other financial service providers focusing on retirement products and advice. Competitive positioning is focused on access to distribution channels, product features and financial strength. Principal competitive factors in the annuities business include product features, distribution channel relationships, ease of doing business, annual fees, investment performance, speed to market, brand recognition, technology and financial strength ratings. In the life insurance business, competitive factors include product and underwriting features, customer service, distribution channel relationships, price, financial strength ratings, technology and financial stability.

Brighthouse Financial serves individual customers seeking retirement savings, wealth accumulation, wealth transfer and income security through its annuity products, and financial security and protected wealth transfer through its life insurance products. The company distributes its products through multiple independent distribution channels and marketing arrangements with a geographically diverse network of over 400 distribution partners. Its annuity products are distributed through national and regional broker-dealers, banks, independent financial planners, independent marketing organizations and other financial institutions and financial planners. Its life insurance products are distributed through national and regional broker-dealers, general agencies, financial advisors, brokerage general agencies, banks, financial intermediaries and online marketplaces. The company believes this strategy permits it to maximize penetration of target markets and distribution partners without incurring the fixed costs of maintaining a proprietary distribution channel.