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The Brighthouse Financial Treasury Story. Forward-Looking Statements
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Forward-Looking Statements This presentation and other oral or written statements that we make from time to time may contain information that includes or is based upon forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve substantial risks and uncertainties. We have tried, wherever possible, to identify such statements using words such as “anticipate,” “estimate,” “expect,” “project,” “may,” “will,” “could,” “intend,” “goal,” “target,” "guidance," “forecast,” “preliminary,” “objective,” “continue,” “aim,” “plan,” “believe” and other words and terms of similar meaning, or that are tied to future periods, in connection with a discussion of future operating or financial performance. In particular, these include, without limitation, statements relating to future actions, prospective services or products, future performance or results of current and anticipated services or products, sales efforts, expenses, the outcome of contingencies such as legal proceedings, trends in operating and financial results, as well as statements regarding the expected benefits of the separation (the "Separation") from MetLife, Inc. Any or all forward-looking statements may turn out to be wrong. They can be affected by inaccurate assumptions or by known or unknown risks and uncertainties. Many such factors will be important in determining the actual future results of Brighthouse Financial, Inc. and its subsidiaries. These statements are based on current expectations and the current economic environment and involve a number of risks and uncertainties that are difficult to predict. These statements are not guarantees of future performance. Actual results could differ materially from those expressed or implied in the forward-looking statements due to a variety of known and unknown risks, uncertainties, and other factors. Risks, uncertainties and other factors that might cause such differences include the risks, uncertainties and other factors identified in Brighthouse Financial, Inc.’s most recent Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission (the “SEC”), subsequent Quarterly Reports on Form 10-Q, including in the sections thereof captioned “Note Regarding Forward-Looking Statements” and “Item 1A. Risk Factors,” and in other filings Brighthouse Financial, Inc. makes with the SEC. Further, any forward-looking statement speaks only as of the date on which it is made, and Brighthouse Financial, Inc. does not undertake any obligation to update or revise any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events, except as otherwise may be required by law. Please consult any further disclosures Brighthouse Financial, Inc. makes on related subjects in reports to the SEC. 2
Today’s Speakers Ehren has twenty years of experience gathered in a variety of consultancy and relationship positions within the financial sector, with market leading treasury software solution providers, consultancy practices, and as a treasury practitioner Ehren acted as onsite technology lead supporting corporate separation activities to stand up treasury operations and enabling systems. As part of this work Ehren lead the IT architectural discussions owned responsibility for deliverables outlining target state operational considerations and dependencies as well as interim state architecture. • Karen is a highly experienced Treasury Operations professional with over 15 years of progressive managerial experience crossing several industries for both domestic and multi-national corporations. • In addition, Karen is well versed in cash and liquidity management, foreign exchange and hedge accounting, cash forecasting and planning and investments. She has been with Brighthouse Financial for the last 2 years. • Karen earned a Bachelor’s degree in Business with concentrations in Finance and Business Management from the University of North Carolina at Charlotte. 3
Who is Brighthouse Financial? • What challenges did Brighthouse solve for? • Decision making framework and strategy • Solution architecture • Benefits realized
BHF: A Focused US Retail Franchise $134.5B AUM $206.3B Total assets $414.1B1 Life insurance in-force 2.5M Policies and contracts in-force $7.4B Combined TAC $14.4B Stockholders’ equity A+ / A3 / A / A FSR Ratings (S&P / Moody’s / Fitch / AM Best) Data as of March 31, 2019 1Net of reinsurance One of the largest providers of annuity and life insurance products in the United States. Formerly a part of MetLife, Inc., Brighthouse Financial became an independent public company in August 2017.
BHF Strategy • Simpler products focused on generating statutory capital • Focused on target market segments • Independent and diverse distribution network • Seek to be a financially disciplined and, over time, cost-competitive product manufacturer
Brighthouse Financial Timeline • June 2016: EY engaged as separation PMO • January 2017: BHF selects Kyriba as preferred TMS vendor and hires 3 directors • August 2017: Brighthouse Financial completes separation from MetLife, Inc. • Technology TSA effective August 2017 January 2017 June 2016 June 2018 January 2016 • June 2018: Kyriba “Go Live” • May 2017: Kyriba project kick-off • June 2017:Solution architecture and approval from ARB • January 2016: MetLife, Inc. announces plans to pursue separation of its U.S. Retail business • September 2016: 1st Assistant Treasurer hired • BHF begins technology scan • December 2016: BHF concludes market scan and system selection project
Challenges Volume Technology Knowledge Resource • Technology • Customizations providing detailed cash views. • Legacy upstream systems with little ability to change. • Agile development of platforms impacting treasury • Complex configuration vs customization • Time • Director onboarding • Managing TSA exit and expectation of early exit savings • Legacy knowledge • BHF Treasury did not have any transition of resources • Understanding current state only to redesign • Volume • Paperwork related to transition of 794 bank accounts • Development of processing rules and workflow • Org Structure • Building a team while designing process and enabling technology • Avoid technical debt Development of scalable and sustainable design
Approach to Technology Enablement A successful Business Architecture design will: • Articulate comprehensive view of business structure • Enable strategic investment decision making • Enable business and technology alignment • Enhance business optimization • Support alignment and communication of various aspects of the organization including data objects, risk and controls, metrics, etc.
Brighthouse Financial Treasury Capabilities Considered areas in scope for Kyriba implementation
Brighthouse Financial Market Scan Maturity Assessment Envisioned Brighthouse Capability Maturity Summarized Maturity Levels View
Over 20+ modules scheduled to go live on day one • Treasury 18.01 • Kyriba • Bank Connectivity • Cash Management and Forecasting • Cash and Financial Accounting • Payments and Payment HUB • Bank Account Management • Bank Fee Analysis (Prior to Go Live) • Workstreams impacting Treasury 18.01 • SAP • GL • Fixed Assets • A/P • HR Payroll • Lexis Nexis (OFAC) • Aladdin (Investment Management Platform) • Investment Accounting • Tax • CRM • Client Solutions
Benefits Realized Deliverables from the Implementation of Kyriba Cash Management and Forecasting Payments and Payment HUB Bank Account Management 100% Cash Visibility Overall better visibility into Actuals and forecasted cash flows allowed for more confidence in investing excess cash ~1 Million Payments per month Standardized process for 150+ users to input and approve payments to streamline the payment process. 50,000 Reduction Bank Fees Global bank account analysis program identified variances, accounts to close, and unnecessary fees. Generating $50m+ a year in interest income $60 Billion Dollars in Wires each year 7 Banks and 12m+ bank transactions a year Bank Connectivity + Forecasted Cash Flows Treasury is adding real value to Brighthouse Payment Connectivity + Formats + Workflows Streamlined process to allow for screening, reduce fraud, and minimize errors Bank Connectivity + Analysis Statements Ongoing cost savings by automatically receiving the analysis statements and having a application quickly analyze it.
Additional Highlights from the implementation • Connectivity: • 7 Banks • 750+ Accounts • 12m+ Bank Transaction per year • Prior Day/Current Day Reporting • 6 Million Forecasted Cash flows from investment management system per year • Transaction Types (Budget Codes Categorization) : 200+ • Users: 160+ Users both Internal and External • Payments: • 16 Payment approval tiers ranging from $1,500 to $500M+ • Workflows: 20+ payment workflows
Brighthouse Financial Operational Volumes • Payment Volumes • 950,000 outbound blind-routed ACH payments • 12,000 payments to OFAC/year • 30,000 wires released/year • $60B of internal/external wires processed each year
What’s next – Digital adaption Identify automation areas Gather information Identify automatableprocesses Compile business case Deploy
