Thank you David and good morning everyone. Once again I hope that everyone listening today and your loved ones are remaining safe and well. Well, 2020 was a year like no other the COVID-19 pandemic upended our communities and the world. Capital markets were volatile.
Over the course of 2020 we saw the S&P 500 reached a record level followed quickly by a bear market and recovery resulting in an 18.4% total return for the year. Long-term interest rates as measured by the 10-year U.S. treasury saw similar volatility. Throughout all of this we continued to execute on our strategy thanks to the tremendous dedication of our employees.
As the COVID-19 pandemic continues to evolve Brighthouse Financials mission to help people achieve financial security has never been more critical. The financial situations of millions of Americans including those working and those already in retirement have been affected by the pandemic and the resulting economic slowdown. At Brighthouse we remain focused on our mission and strategy and continue to believe that we are well-positioned to help people achieve financial security and address retirement concerns over the long term.
We are also focused on our communities. Throughout 2020 Brighthouse financial provided financial assistance to help meet some of the most pressing needs of our communities during these trying times. The Brighthouse Financial Foundation made contributions to more than 49 profits with a focus on COVID-19 response and racial equity.
Before turning to our results this quarter, I would like to touch on some of our strategic accomplishments for the year.
First, we repurchased approximately $473 million of our common stock in 2020, a reduction of approximately 17% of the shares outstanding relative to year end 2019.
Second, we completed the revision of our hedging strategy significantly reducing the risk profile of the company.
Third, we paid ordinary dividends of approximately $1.3 billion to the holding company primarily consisting of $1.25 billion from Brighthouse Life Insurance Company or BLIC the first dividends paid by BLIC since we became an independent public company. Fourth, we had strong sales results in both annuities and life insurance, launched two new products and expanded our distribution network.
Next, we achieved run rate expense reductions of $166 million relative to the first year post separation exceeding our target of $150 million. And finally we made significant progress in our multi-year effort to implement our future state operations and technology platform.
So now let me turn to our fourth quarter financial results.
First, we continue to prudently manage our statutory capitalization.
Our hedging program performed as expected in the fourth quarter of 2020.
Importantly, we estimate that our combined risk-based capital or RBC ratio was approximately 485%.
Additionally, we ended the year with liquid assets of the holding company of approximately $1.7 billion. Ed will provide more details on statutory results in a minute.
Second, we had a strong sales quarter, despite the challenging environment. Annuity sales were approximately $3 billion, up 58% compared with the fourth quarter of 2019 and up 26% sequentially.
Additionally, we generated approximately $15 million of life insurance sales in the fourth quarter of 2020. I am very pleased with the progress that we have made as we continue to execute on our life insurance strategy.
Third, let me turn to total annuity net inflows which were $72 million in the quarter driven by continued strong sales as outflows returned to near normal level.
As we have 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 $236 million in the fourth quarter and finally we continue to make necessary investments in our technology infrastructure and in our business. We refer to these investments as establishment costs. In the fourth quarter establishment costs were approximately $40 million pretax.
As I've said before we entered the current climate from a position of strength and our results in 2020 demonstrate that our balance sheet and liquidity remain strong.
Before turning the call over to Ed to discuss our financial results, I would like to touch on our areas of focus for 2021.
First, we intend to continue to execute on our focused strategy.
Second, we plan to continue to prudently manage our statutory capitalization.
As we have said previously, we target a combined RBC ratio of between 400% and 450% in normal markets.
Third, we want to further drive the evolution of our business mix by adding high-quality new business.
Our sales results in 2020 were very strong, driven by fixed rate annuities.
For 2021 we currently expect growth in shield and variable annuities while fixed rate annuity sales are expected to be lower. In 2021 we are committed to enhancing our products with a focus on shield as well as rolling out SmartCare to more firms and adding more wholesalers as we continue to execute on our life insurance strategy. And we remain very excited about our selection to help deliver BlackRock's life path paycheck and investment solution that is designed to provide millions of American workers with simplified access to lifetime income throughout their retirement.
Next, we intend to continue to prudently manage our expenses. We previously committed to a cumulative $175 million reduction in corporate expenses relative to our first year as a public company. That's $150 million in 2020 an additional $25 million in 2021. We exceeded the target in 2020 and would like to achieve the remainder of the expense reduction commitment in 2021. With that said, we will continue to invest in our infrastructure with the goal of providing better support to our distributors and their financial professionals as well as our policyholders and contract holders.
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. These TSA exits and associated systems transitions put us closer to our future state operating platform. We currently anticipate about $150 million of establishment costs over the next two years as we continue the transition to our future state operations and technology platform. The majority of the expense is expected to occur in 2021. And lastly let me discuss share repurchases. Since the announcement of our first stock repurchase authorization in August of 2018 we have repurchased a total of more than $1 billion of our common stock through February 9 of this year. This represents a reduction of approximately 28% of shares outstanding from the time we became an independent public company. Last night we announced an authorization to repurchase up to an additional $200 million of our common stock.
Assuming full utilization of this new authorization and the $53 million remaining under our $500 million stock repurchase authorization announced in February of 2020.
We will have repurchased $1.3 billion of our common stock, more than 85% of the way towards our target of returning $1.5 billion to our shareholders by the end of 2021.
As I have said before we have a capital return target that we would like to achieve. With that said we will continue to emphasize prudence and flexibility regarding future share repurchase authorizations. To wrap up, our balance sheet and liquidity positions are strong and we continue to believe that we have the right strategy in place to deliver long-term shareholder value and that we are well-positioned to continue the execution of this strategy. With that I'll turn the call over to Ed to discuss our financial results. Ed?