$14.00
$64.82
bear $14.00
base $42.95
bull $64.82
margin of safety $17.00
market price* $19.57
What the business is. F&G Annuities & Life is a US life insurer that mostly sells retirement savings products: fixed indexed annuities, registered index-linked annuities and multi-year guarantee annuities, plus pension risk transfer contracts, funding agreements and indexed universal life. It earns the spread between what its investment portfolio yields and what it credits to policyholders, plus surrender charges and fees. Assets under management before reinsurance were $74.7 billion at June 30, 2026, or $55.9 billion after reinsurance. Fidelity National Financial (FNF) controls the company with about 70% of the common shares after it distributed roughly 12% of F&G to its own shareholders on December 31, 2025. FNF also holds mandatory convertible preferred stock that converts into about 5 million common shares on January 15, 2027. In March 2026, F&G sold its Bermuda reinsurer, F&G Life Re, ceding a $1.8 billion block of business. How we measured earnings. For an annuity writer, reported operating cash flow ($4.7 to $6.0 billion a year from 2023 to 2025) is mostly policyholder and reinsurance money moving through the company, not cash the owners can take out. We therefore use GAAP net earnings available to common shareholders. That figure is already after interest on the company's $2.24 billion of holding-company notes, stock compensation, the preferred dividend, and the amortization of policy acquisition costs. Because borrowing and policyholder funds are the raw material of an insurer, we do not subtract the debt a second time. Per diluted share, earnings were $5.52 in 2022, a loss of $0.47 in 2023 (driven by investment losses), $4.88 in 2024 and $1.88 in 2025. The 2025 figure is after the $17 million preferred dividend; our previous analysis used $2.01, which was before that dividend. We anchor on the median of these four years, $3.38 a share. That covers the business as it has existed since FNF's ownership and the post-2022 accounting basis, and it spans a loss year and two strong years. Earlier years are on a different accounting basis and are excluded. Recent results. Earnings fell 61% in 2025 because alternative-investment income ran about $278 million below the company's own long-term expectation. In the first half of 2026, the company earned $1.24 per diluted share, including a second-quarter loss of $0.62 that the company attributed largely to $144 million of unfavorable mark-to-market effects. Alternative-investment income stayed below expectation, at $93 million for the half. Year 1 of our base case is $2.48, which is that first-half pace annualized. This is above 2025's $1.88 because the first-half 2026 results are already reported, but it remains well below the anchor. Gross sales fell to $2.7 billion in the second quarter from $4.1 billion a year earlier, so we credit no growth from sales. Although assets have grown strongly, per-share earnings have not, and part of that growth was funded with new shares (8 million issued in March 2025). Base case: about $42.95 a share. Earnings of $2.48 in year 1, then $3.38 a share for years 2 to 10. That is the level the business averaged across a mixed run of good and bad investment years, sustained as new annuity sales replace policies that surrender or mature. After year 10, earnings fade 3% a year for 30 years. Nothing in the filings secures new-sales momentum that far out, but the in-force block and distribution network (including the 70% stake in Roar, acquired in January 2024) persist for a long time. The business is worth about $5.84 billion, or $42.95 a share on about 136 million shares counting the preferred conversion. No debt is subtracted because the earnings are already after interest. Converting the preferred removes about $17 million a year of preferred dividends and adds about 5 million shares, which roughly offsets on a per-share basis. Bear case: about $14.00 a share. This is a full credit cycle of the kind life insurers went through in 2008 to 2010, and that F&G showed on a small scale in 2023, when investment losses turned the year into a net loss. Earnings are $1.88 in year 1, then two loss years of $1.95 a share each, an after-tax swing of roughly $520 million a year from the 2025 level as credit losses and impairments hit a portfolio heavy in private credit and alternatives. Earnings then recover only to $1.80 a share for years 4 to 10, reflecting persistently weak alternative returns and costlier funding: the $500 million of 7.40% senior notes due 2028 must be refinanced during the downturn. After that, earnings fade 6% a year for 20 years. The business is worth about $1.90 billion, or $14.00 a share. That is slightly below tangible book value of about $14.77 a share at June 30, 2026 (equity of $4.61 billion less $2.12 billion of goodwill and $0.55 billion of intangibles). We model no forced dilution, because FNF has supported capital before. An offering at depressed prices would push this case lower. Bull case: about $64.82 a share. Year 1 is $2.48 as already reported, then earnings return to $5.20 a share, about the average of 2022 and 2024, for years 2 to 10 as alternative-investment income returns to the long-term level the company expects and spreads hold on the larger book. Earnings fade 3% a year after that. The business is worth about $8.82 billion. What we are least sure of. First, the earnings level: four years of history range from a loss to $5.52, and two of the last six quarters were weak. If $2.48 a share proves to be the true level rather than $3.38, the shares are worth about $32. Second, the investment book: private credit and alternative assets are where a downturn would hit first, and 2023 shows how quickly that becomes a loss. Third, control: FNF decides the timing of any sale of its stake and the capital policy. The worst plausible outcome is a credit downturn that forces capital raising at low prices while a 2028 maturity comes due. The insurance subsidiaries are regulated and policyholder liabilities are long-dated, so a run is unlikely, but common shareholders would be diluted. Margin of Safety price: $17. At $17, the $1.00 annual dividend ($0.25 quarterly) yields close to 6% over the holding period, and the price is only modestly above tangible book of about $14.77, which is close to our bear case. If the base case plays out, from $17 it implies about 23% a year over five years including dividends, or about 39% a year over three years. If the earnings level settles at $2.48 instead, the five-year implied return falls to about 16%. That is why the margin-of-safety price is no higher: it leaves room for that error, which is at least as likely as the bull case. In the bear case the five-year implied return is about 6% a year. At $17, the downside is mostly the credit cycle itself rather than an uncertain earnings level.