CRBG

Corebridge Financial ($CRBG) Accelerates Independence with First Share Buyback Following AIG's Massive Divestments

03/26/2025 03:07

Corebridge Financial ($CRBG), a major U.S. insurance and retirement solutions provider, recently executed a $40 million share buyback. On March 20, Corebridge purchased a total of 1.6 million shares at $25 per share, demonstrating confidence in the company's value. This share repurchase came after the stock had corrected from around $32 to below $30, and is particularly noteworthy as it represents the first major buyback following extensive share divestments by parent company American International Group ($AIG) over the past 18 months. Corebridge Financial, spun off from AIG in 2022, provides annuities, life insurance, and asset management services to individual and corporate clients across the United States. The company currently has a market capitalization of approximately $22 billion and manages about $404 billion in assets. Over the past two years, Corebridge's stock movements have been closely tied to AIG's divestiture activities. In 2024 alone, AIG conducted five major share sales. Particularly significant were the June and November 2024 sales, worth $876 million and $936 million respectively, followed by a massive December transaction where AIG divested 122 million shares for approximately $3.8 billion. Despite these substantial selloffs by AIG, Corebridge's stock has demonstrated remarkable resilience. While there were short-term declines following some divestments, the share price has generally trended upward, starting from around $28 in June 2024 to reaching $33 by March 2025. This suggests the market positively views AIG's reduced stake as enhancing Corebridge's independence. A particularly significant development occurred in December 2024 when Japan's largest life insurer, Nippon Life, invested approximately $3.8 billion in Corebridge. This transaction represented Nippon Life's acquisition of a substantial portion of the shares divested by AIG, aligning with Japanese insurers' international expansion strategies. During the same period, Nippon Life also acquired Resolution Life Group Holdings for $8.2 billion, accelerating its entry into the U.S. insurance market. Financially, Corebridge demonstrates solid profitability. For 2024, the company reported annual revenue of approximately $18.6 billion and net income of $2.2 billion, with earnings per share (EPS) of $4.01. The current price-to-earnings (P/E) ratio stands at 8.3x, relatively low compared to industry averages, while offering a dividend yield of 2.9%. In February 2025, Morgan Stanley upgraded Corebridge from 'neutral' to 'overweight' and raised its price target from $35 to $43. Analysts highlighted Corebridge's strong distribution network and fee-based earnings strategy as providing competitive advantages over peers. The recent share buyback suggests management believes the current stock price undervalues the company's true worth. Corebridge's purchase price of $25 per share was approximately 20% below the market price at that time, indicating management's confidence in the company's long-term value. Investors should monitor Corebridge's independent growth strategy and potential profitability improvements going forward. Key points to watch include whether increased managerial autonomy resulting from AIG's reduced stake translates into improved business performance, and what synergies might develop from the relationship with Nippon Life.

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