Thank you, David, and good morning, everyone. I want to cover a few topics today.
First, I will provide some perspectives on the current environment.
Next, I will give an update on our share repurchase program. And finally, I will discuss Brighthouse Financial’s results in the second quarter.
So let's start with the current environment. I hope that you and your loved ones are well and staying safe as the COVID-19 pandemic continues to unfold and impacts our communities and the global economy. Brighthouse Financial’s top priority remains the wellbeing and safety of our employees and their families, our partners and our customers.
As I've said, it is an uncertain times like these, when our mission to help people achieve financial security becomes even more important. Despite the challenges created by the pandemic, we remain steadfastly focused on our mission and strategy and on delivering for our partners, customers and our shareholders.
Importantly, we answered the current climate from a position of strength and remain confident in our focused strategy.
Our balance sheet and liquidity remains strong.
Our investment portfolio is high quality and well-diversified and we continue to believe that we are well-positioned to weather the current downturn.
The second topic I would like to cover is share repurchases. Since the announcement of our first stock repurchase authorization in August of 2018, we have repurchased a total of approximately $870 million of our common stock, a reduction of more than 22% of shares outstanding from the time we became an independent public company, and well ahead of our initial expectations.
As previously disclosed, we temporarily suspended repurchases of our common stock on May 11th and that suspension remains in effect at this time. We continually assess market conditions, as well as other factors. And we will continue to be prudent, while retaining flexibility should circumstances warrant resuming share repurchases this year.
Importantly, our target of returning $1.5 billion of capital to our shareholders by year-end 2021 remains in place.
Now, let me turn to second quarter results.
Our key highlights for the quarter are summarized on Slide 5 of our earnings presentation.
First, we continue to prudently manage our statutory capitalization.
Our hedging program performed as expected in the second quarter of 2020.
Importantly, we estimate that our combined risk-based capital or RBC ratio remained in the range of 515% to 535%, consistent with the range disclosed for the first quarter of this year. The RBC ratio in the second quarter includes the impact of a $500 million subsidiary ordinary dividend paid to the holding company in the quarter. Ed will provide more details on statutory results shortly.
Second, we had a strong sales quarter, despite the challenging environment. Annuity sales were approximately $1.8 billion down 3% compared with the second quarter of 2019.
However, I am extremely pleased that we grew our annuity sales 6% in the first six months of 2020 compared with the same period in 2019.
Our annuity sales results through the second quarter of this year demonstrate the strength and complementary nature of our annuity product portfolio as we weather the current environment.
Additionally, we generated approximately $12 million of life insurance sales in the second quarter of 2020. I am very pleased with the progress we have made as we continue to execute on our life insurance strategy.
As I reflect on all that we've accomplished since reestablishing a competitive presence in the life insurance business last year, I want to give special thanks to our life insurance team, and our life insurance distribution partners.
While the current market environment remains a headwind to near-term sales of annuity and life insurance products for Brighthouse and for the industry, we remain focused on broadening our product offerings and expanding our distribution footprint. We're very excited about expanding our relationship with BlackRock, as we join the efforts to deliver BlackRock’s LifePath Paycheck, an investment solution that is designed to provide millions of American workers with simplified access to lifetime income throughout their retirement. With respect to life insurance, we remain focused on growing our business and expanding our digital footprint. To that end, in June, we announced the launch of Brighthouse SimplySelect, a new term life insurance product available online through Policygenius. Brighthouse SimplySelect features a fast and simple purchase process that doesn't require invasive testing, allowing an underwriting decision within 24 hours for most applicants.
As I've said before, rising healthcare costs, unforeseen healthcare needs and insufficient income in retirement are pervasive retirement concerns for Americans. And we believe Brighthouse Financial is well-positioned to help people achieve financial security and help address retirement concerns over the long-term.
Third, let me turn to total annuity net outflows, which were approximately $250 million in the quarter, down from both the second quarter of 2019 and sequentially, driven by continued strong sales as well as the market environment as fewer contract holders are surrendering policies.
As we said previously, we expect to see a continued shift in our business mix profile over time, as we add more cash flow generating and less capital intensive new business, coupled with the runoff of less profitable business. Fourth, corporate expenses, which do not include establishment costs, were $210 million in the second quarter, lower than our expectation. We remain committed to reducing corporate expenses by $150 million on a run rate basis by the end of this year and by an additional $25 million in 2021.
Finally, we continue to make necessary investments in our technology infrastructure and in our business.
We have referred to these investments as establishment costs. In the second quarter, establishment costs were approximately $35 million before tax.
As I've said before, we are being prudent in how we are managing our way through our expected final couple of years of TSA exits. We now believe establishment costs will be approximately $125 million to $135 million in 2020 and $55 million to $65 million in 2021, both on a pre-tax basis. These TSA exits and associated systems transitions put us one step closer to our future state operating platform.
Before wrapping up, I want to take a moment to once again thank our employees for their tireless work, and the resiliency they've demonstrated over the past several months. Since March, our employees have remained in a work from home environment, as we've prioritized their health and safety, while continuing to monitor the COVID-19 pandemic. Despite the challenges that can come with working remotely, our employees have risen to the occasion, exemplifying our core values of being collaborative, adaptable, passionate. I'm extremely proud of their focus and commitment, which have enabled us to continue to support our customers, partners and communities during these very difficult times. To wrap up, we believe our balance sheet and liquidity positions are strong.
We continue to believe we have the right strategy in place to deliver long-term shareholder value. And we believe that we are well-positioned to continue the execution of our strategy. With that, I'll turn the call over to Ed to discuss our financial results. Ed?