All right, let's get started. For important disclosures, please see the Morgan Stanley Research Disclosure website at morganstanley.com/researchdisclosures. The taking of photographs and the use of recording devices is not allowed. If you have any questions, please reach out to your Morgan Stanley sales representative. All right, with that out of the way, good morning. Thank you all for joining us here at Morgan Stanley's Financial Conference. I'm Michael Cyprys, equity analyst, covering brokers, asset managers, and exchanges for Morgan Stanley Research. It's my pleasure to welcome Allan Levine, Chairman, CEO, and co-founder of Global Atlantic. Founded in 2004, Global Atlantic, or GA, as we call it, is one of the largest annuity providers in the U.S., serving more than 2 million policyholders through its retirement and life insurance products.
Two years ago, KKR, at the corporate level, acquired a majority 63% stake and has helped GA double in size since. A tremendous achievement.
Thank you.
As you know, KKR is a global investment firm that offers alternative asset management, capital markets, and insurance solutions, and has over $500 billion of assets under management. With that, Allan, thank you for joining us.
Great. Thanks, Mike. It's great to be here with all of you.
We're especially thrilled to have you, because I understand this is, I think, your first conference appearance, so you have done meetings with investors.
I have.
But you're.
It's an honor to be here at the Morgan Stanley event to kick things off.
Well, welcome. Why don't we start big picture? Given I think you are new to many,
Sure.
folks here in the room. You founded GA nearly 20 years ago, I believe it was. For those less familiar around the room, why don't we kick off with GA's origin story, as I like to call it. What attracted you to the insurance industry at that time? What was your vision then, and how has that evolved since the founding of the company?
By the way, it's hard to believe how quickly time has gone by. What I'll try to do is hit the highlights in the next couple of minutes over the last 20 years to give you a little bit of sense. Look, the original idea when you said back in 2004, 20 years ago at Goldman Sachs at the time, was, you know, how do we continue to expand our business model? How do we grow? What we realized early on was that you had this great business called insurance, and you had what we did at Goldman Sachs, and the reality is they were being run completely separately. The general thesis was around convergence. Could these two businesses, over time, converge and make each other better?
Our view was, if we took the best of what we did, what the insurance industry did and the best of Goldman Sachs. I'll give you the three things we were focused on at Goldman at the time. One, you know, if we could attract and retain incredible people around a culture, we were committed around risk and investment management and had competitive advantages there, and ultimately, could develop deep client relationships. By the way, we were patient in building an insurance business. Over the cycle, we could build a great business. By the way, that theme over the last 20 years has been consistent. We originally started through both buying and building new businesses. It included, getting into the life and annuity reinsurance business through acquisition, and through building organic businesses.
We also had, I know we're not going to cover a lot of this here. We had a property and casualty business as well.
I don't have that on the list, P&C.
Yeah, no, I know. Well, it'll end with it not being on the list either.
Okay.
You know, as a part of our journey, we did also start a company after Hurricane Katrina, Wilmerida, built a Lloyd's syndicate, and eventually acquired a company in Bermuda. By the way, things were going really well at Goldman Sachs. As you'll recall, in 2008, everyone will recall, great financial crisis. It became clear very soon after, and by 2012, being an insurance company inside a bank didn't work from a capital perspective. It also didn't align with our strategic vision for the business, where we're really looking to get into retail and get into individual markets distribution. That's phase one at Goldman. Phase two, independent company. We just celebrated our 10-year anniversary on May 1st, 2013.
On that date, we left Goldman Sachs and raised money from 1,200 independent shareholders. We were a true independent company, no majority shareholder at that time. This was a really interesting phase for our business because it gave us the opportunity to really, what I like to say, is realize our full potential as an organization, highly entrepreneurial. One of the most important things we did in the early days is we acquired a company called Forethought Financial, that was in the retail annuity business. They'd recently taken over The Hartford's distribution plan, a leader in the annuity space. From there, to be honest with you, we started scaling our life reinsurance business and, more importantly, our retail business.
By 2015, we decided that we had so much growth opportunity in the life annuity space and that our property and casualty business was subscale and property cat oriented. We decided to sell that and put 100% of those proceeds back into growing our business. By the way, a theme for our company is constantly redeploying capital and finding growth opportunities ultimately. Since 2015, we've been executing on a very similar strategy, U.S.-focused, life and annuity based. Let me just complete the history. From that period, we've achieved top five status in the Fixed Annuity space. We continue to expand into new lines on the institutional side. We raised third-party capital through our Ivy structure, and we plan to go public, which we were talking about earlier.
I feel really fortunate that we decided not to go public, and I feel incredibly fortunate that we were able to find a partner like KKR, which, you know, as we talk about our results on the forward, has really been the right partner, right long-term partner, and there's a lot of upside from this partnership going forward.
Which leads to my next question on the KKR aspect. You came to extend that relationship with KKR about two years ago, right? They took the controlling interest in GA. How did this relationship come about? Maybe tell us?
Sure.
A little bit about that. What attracted you to KKR? As you kind of reflect on the past couple of years with that combination, how's it going? What are some of the advantages?
Yeah, I, like I said, our path, if you had spoken to me in 2019, was to go public, and we had done a lot of work in that regard. I was introduced to Scott Nuttall, who at the time was co-president of KKR, now co-CEO, through one of our independent board members. This would have been because the timing matters here a little bit, it's interesting. This would have been January of 2020. We can all kind of think back what the world was like then. You know, it became clear from those early meetings with Scott and other senior people at KKR that culture values strongly aligned, and more importantly, or equally important, vision for the business and strategy also aligned.
In many ways, it felt very natural, even more natural, considering we had not that much connectivity between our firms leading up to that. That was, it became clear that, like, one plus one could equal a lot more than that if we did this right. My last dinner in New York City on May 12th, 2020, was with Scott and Joe, the current co-CEOs. Obviously, we went dark, and we went into the COVID phase. What was really interesting during that period of time from a diligence perspective is, everything was done on Zoom. If you think about one of the hallmarks of our business, as I mentioned, like, the cornerstone of our business is all around risk and investment management. We're an insurance business, and we make promises we need to keep.
No better way to assess risk and investment management during that COVID phase. KKR got a firsthand look at how we risk manage, how we think about liabilities, how we think about assets. Then we announced our deal July 4th, almost three years ago. How's it done since then? You know, really well. There's lots of lenses to give you on our performance. I'll give you the obvious ones, and I'll give you some less obvious ones. The obvious ones, you mentioned it earlier.
We have been able to double assets since the time we announced the deal, from $70 billion at the time we announced it to, I think, $142 billion as of our last close, and with our forward, you know, well on our way to $150 billion, given the MetLife transaction we recently announced. We've been able to produce really strong returns. What we were looking for from KKR were the following: institutional asset management that we can scale to become a competitive advantage, deep access to capital, and then alignment. We've gotten all of those things in this partnership. Under investment capabilities, it's not just about scaling assets, about how we've done them. You know, we were originating about $10 billion in assets before the KKR deal. Now it's consistently north of $30 billion.
On the fundraising side, you know, since the time we announced the transaction, we've put an additional $750 million of primary. We're also announced our Ivy II fundraise. That's our third-party capital vehicle, where we had targeted raising between $1.5 billion-$2 billion to support our block and institutional business. That's not closed yet, but we expect to be above the high end of that range. I think the closing is as of June 30th of this year, more to follow as well. On alignment, and I'll talk about this a little bit later as well, it's given us the opportunity to do a lot of other things.
When you ask me how it's going, there's the obvious stuff, but let me just share a couple of other things that I wanted to highlight. One, because of the way we're structured, we work together on a lot of other things that co-benefit our businesses. Some of them include expanding internationally. We talked earlier. You know, we've announced deals in Singapore, Hong Kong, and most recently, Japan last week. Couldn't do that without the KKR global footprint and our teams working together. We made just a bunch of really interesting things from a product development and distribution perspective. We've got a big retail network. KKR is working on that as well. The last thing I'd just say is the, there's the intangible benefit that isn't obvious. We've got 10 offices around the country, plus or minus.
We cohabitate in New York, over at Hudson Yards. We get the opportunity every day to learn everything there is about their business and how it's operated. They get to learn about ours, and we get to make each other better through that learning experience. It's gone really well, and we're thrilled with the partnership so far.
That's great. Why don't we turn to the macro backdrop? Rising rates, higher yields have benefited insurance earnings, as we've seen, for KKR. With an evolving rate backdrop, though, how are you thinking about the portfolio now? How is the business positioned here as we pivot and maybe think about potential for rate cuts?
Look, 20 years later, I don't ever remember a macro environment. None of us do, like the one we're in. Rapidly rising rates, volatile equity markets, sustained inflation. By the way, our expectation is rates will remain elevated for probably longer. We always think about we're an insurance business first and foremost. How we think about the business is we think about risk management, we think about scenarios, we think about downside. We are essentially always thinking about what could go wrong and how we think about running our business. As far as macro risk, equities or rates, you asked me about rates. You know, fundamentally and philosophically, we try not to take outright macro risk in our business.
We don't think we need to be successful, that includes interest rates. I'll come back to that. One other thing about rates, if we're an insurance business, certainly for our insurance business, is it's a net positive from a business perspective. Why is that? If you look at our individual markets business, where we're providing retirement solutions, already a strong demand and need for those products. Higher rates make us and give us the ability to provide even more value. What we've seen is our Fixed Annuity market grow substantially to record levels last year and on our way to this year as well. Even on our institutional business, higher rates actually result in more opportunity for block transactions.
By the way, we have a very large flow reinsurance business, where the same benefit that's happening on our retail or individual market side, that we get direct through our platform, we're also getting from our institutional business as well. Net rates, a positive. More specifically, you asked me about our business, like I said, we attempt to not take outright macro risk. If you think about interest rates in particular, strict ALM or cash flow matching. From an impact perspective at Global Atlantic, we'll see if rates go down. I guess we'll all learn this together. From an impact perspective, you know, rates from here, with the exception of our floating rate positions in our investment portfolio, we don't expect to see, you know, meaningful impact to our business from rate changes.
The other topic that comes up in conversations with investors is around rescissions and surrenders, right, particularly since the onset of the banking challenges there. Similar question there, just around, you know, how do you think about that with your business? What trends are you seeing at GA? You know, how does this compare versus prior cycles?
Look, I appreciate some of the work that you've published. I think that, obviously, post-Silicon Valley Bank, there's been a lot of attention on insurance and insurance liabilities. So for this audience, and I'm sure you're all well familiar with, you know, there's a really meaningful difference between demand deposits in banks and retirement solutions that we provide and the type of products that we underwrite. Again, I think you've done a nice job of putting that in your research pieces as well. Demand deposits, highly liquid, there for expenses, usually transferable online. What do we sell? Retirement solutions. What are they for? Typically part of an asset allocation model. They're typically purchased for accumulation, but also for other benefits. For example, death benefits, income benefits, or tax planning. Very, very different.
By the way, they come with surrender charges. Let's talk about our business and give you a little bit more information. Across our whole business, only around 18% of our annuity business is outside of the surrender charge period. Within that book of business, it's both seasoned and diversified, which is why we feel really good about it. Seasoned being the majority of that has been written for 10 years or longer, so a lot of data, a lot of experience. Diversified, it is, we have a retail business, and we write our own business. This business is made up primarily of our reinsurance business, where we've got underlying exposure from 15 different counterparties.
We get a really broad-based look of the overall industry, but if you got to think about our business, either in surrender, seasoned, and diversified. Again, feel good about our exposure. What have we seen? That's the question we get all the time. Look, across this very large book of business, we put together models. We have expectations. Those models say when rates go up, we expect surrenders to go up. What we've seen is, our experience and our actuals across our board on average have been consistent with our models. We feel good about that as well. Just one other thing, and I'm going to come back to this risk theme over and over again in running an insurance business. While models are what we analyze our business around, the actuals can deviate from models.
What you'll find at Global Atlantic is we actually run the business with a significant amount of excess liquidity on top of that.
The other topic that comes up in conversations with investors, is also around the portfolio, just around quality, how it's invested, particularly versus other insurance companies that are out there.
Right.
Just curious if you could speak to some of the portfolio mix, where that stands, how that stacks up versus others, and maybe you can kind of give us a flavor of how much is in CRE versus structured credit and so forth.
I guess any way to start for our business on investment portfolio is to actually start with the liability side. Like, if you think about how we do asset allocation, it starts with what policies we're writing across our individual institutional business. Why? Because what we're going to own in our investment portfolio is going to be tied to the duration and liquidity and any other fundamental factors in the business that we're writing. That's a starting point. What do we own? Look, our portfolio is going to be consistent with what other insurance companies own, so all the major insurance company-oriented asset classes. Let's start with we're going to be super senior in the capital structure. The 95% of what we own plus is going to be NAIC 1 or 2 or investment grade. Again, we're an insurance business.
Second thing is we're going to own a lot of corporate credit, commercial real estate, residential real estate, structured products. What's different about our portfolio, because I want to respond, is probably if you look at our portfolio versus other insurance companies, we're probably going to have more structured product-oriented investments. Why is that? Because we think between us and KKR, we've got great origination, credible underwriting. By the way, we feel like in these products in particular, we're getting paid excess spread, not to take excess credit risk. We feel really good about the credit profile, actually to take illiquidity risk. We think as an insurance company, we're really well suited to do that. Okay, let me tell you what's not in our portfolio. Okay, what you won't find in our portfolio are emerging markets, hedge fund investments, or private equity commitments.
That gives you at least a sense of, like, how we're focused in our business and our business model from an investing perspective. You got to remember a lot. CRE, that was the question. If you think about our book of business today, around 13% or $16 billion is invested in commercial real estate lending. You asked me about the office exposure. The significant majority of our office exposure exists in our commercial real estate lending book. That's about $4.4 billion, plus or minus. We feel really good about our exposure here because 97% is first lien, right? LTV of around 60%. We're an insurance business, we stay high in the capital structure. Significant majority, CM1 or CM2, again, highest type of risk that you can own.
Again, from a positioning perspective, we feel like not only are we at the senior level, but we've got a really well-written and diversified book.
That's a great overview. Maybe just taking that a step.
Sure.
How is the performance and the quality of the book holding up in this backdrop relative to your expectations? Are there any sort of signs of stress? What are the KPIs that you look at to assess that? What would be your expectation for a loss rate this cycle versus the past five or 10 years?
I mean, the starting point on, like, estimating losses is around expectations, and it starts with what do we own? I'm going to go back to, again, we own 95%-96% NAIC one or two. We would expect our losses to be really low. Historically, if you look at our impairment levels over the last five years, I think we've averaged around six basis points versus the industry of around 14. We have seen, and we've got a track record of experiencing low losses. You know, by the way, as far as, like, spaces that we're interested, you know, you hit the nail on that. Obviously, we're focused on things like commercial real estate office within our portfolio, which I commented on earlier.
Again, where we are in the capital structure as an insurance business, we feel really good about the exposure that we've got. You know, as far as losses on the forward, you know what I'd say is, look, we recognize the fact we're in a different part of the credit cycle right now. We all, we all do. Expectations off of our models would be, while losses would be higher than they have been, we expect them, given what we own and what we underwrite, to remain relatively low.
Higher than before than the prior cycle, but still low?
Higher than what we've seen in the last five years, but still low.
Still low. Okay, great. And what about ROEs? What can we expect off of GA's book for a return on equity? What are you sort of targeting for new business, and how does that compare versus the existing book?
We have a 10-year track record of consistently producing low to mid-teens returns, which we feel good about. You know, as far as guidance goes, Rob Lewin, CFO of KKR, I think in the fourth quarter earnings release provided guidance. I think that was 12%-13% after tax, and KKR has since converted that to a pre-tax number. That's the right number to look at. I guess your question for us in regards to in-force versus new businesses, look, we think what we're underwrite is generally consistent with what we're experiencing in our in-force business right now.
Okay, great. Now, one of the trends we've seen across the asset management industry is more asset managers getting into insurance. Just curious of how you would sort of contrast the KKR GA relationship, how that differs from others, and what does it allow you to do differently versus others across the industry?
Well, as much as I'd love to spend a lot of time going through everyone else's business model, I'm going to focus on our own business model here. I mean, you can tell I'm a big believer in the model that we've put together with KKR. I'm going to speak to ours and tell you why I like and believe in our model versus looking at others. Three frames I'll give you for our model. Alignment, continuity, and the ability to think long term. Some of this would have come up when I talked about how things were going as well. Let's talk about alignment. It was really important to me and to our team to get alignment right with KKR when we structured this deal.
For me, the best way to articulate alignment is the fact they own 63% on balance sheet, not in a fund, large strategic investment. It matters. It means we're not just partners, but we all jointly act like owners together. Look, lots of different models are going to work lots of different ways. I'll tell you, in our model, that alignment is incredibly powerful. I think we invest better. I think we're able to raise capital efficiently, and I think there's all these other things we can do, expand internationally, think about product development, make each other's businesses better. I don't think you get that in other models, or at least I don't know if you get that in other models. I know we get it in our model. Again, I only know what our own experience has been.
I think that's worked really, really well, and I think there's a catalyst for opportunities in the future. As far as continuity goes, look, I think, and I feel really fortunate to lead an organization of incredibly talented individuals. We've got a great leadership team. You know, the reality is, about half of our leadership team has been together since the very early innings of building this business together. The whole executive leadership team is exactly the same before the KKR transaction as it is today. Continuity matters. The reality is we've also been given the opportunity with KKR, despite the fact a majority owner, to really continue to excel and run our business in the way that we think makes sense, with great complementary value from KKR across the board.
We are and have been running an insurance business for almost two decades now. Long track record, but the continuity matters, and I think that's different in our model. The last thing is about long term. We're in a forever business ultimately. If you get to the core of what we do, we provide retirement solutions and life products to policyholders, and we make promises forever, so we need to be able to think long term. The nature of our partnership and our structure, in particular, gives us the ability to do that. We can think long term from a strategic perspective, from a growth perspective, from a product perspective, and here's one that really matters: from investing in our platform perspective. End of the day, insurance is a pretty complicated financial services business.
The ability to invest long term in operations and technology, I mean, all of that, I think, makes a big difference. You know, I know you asked me a question about other models. I'm a big believer in the model that we've got and all the benefits that come through.
One thing we see with some of the other models is they've been focused more on the annuity space, right? Fixed Index in particular, whereas your model is a little different, you're a little broader than that. I think about 20% of your book is in life and other products. Maybe you could speak to why that is, how you get comfortable?
Sure.
Other risks. What you have to do differently to manage those risks?
I guess this is the advantage of having done this for 20 years. I mean, we've been underwriting life products now for two decades, so incredible and deep experience in understanding it. But I want to be narrower in the answer. We're really just focused on certain parts of the life business, and the ones that we think we've got a competitive advantage in are in asset-intensive life products. Why is that? Capabilities to underwrite stable liabilities. The same thing we can do on our annuity side, leverage our investment expertise to provide incredible value to our clients and to our partners. We think that makes a really big difference. I think it's a differentiator for us as well. I think we're able to, and a diversifier.
Differentiators, we're actually able to come to the table to our clients and offer a multifaceted, multi-product solution. MetLife, the deal that we just announced a couple weeks ago, was one of those. It's unique in a lot of ways in what we can provide and also ultimately diversifies our business as well. You know, again, it's something we've been doing now for a long period of time. It's something we feel really good about the risk, and we think it diversifies and really positions us well competitively.
I'm going to come back to the block in a minute.
Sure.
Just maybe first on origination capabilities, 'cause I think that's a key differentiator for you as well. Just as the insurance business grows and scales, how have you been able to continue to grow the investment origination capabilities? How has that expanded, and where do you see white space opportunities to further expand that and broaden it out from here?
God, if I was up on stage in 2019, I'd have a totally different answer. We have a lot of white space, as an aside. Here's one of the things we recognized, wasn't that long ago, when we were trying to build our business. We played about $50 billion in assets. We had a reasonably small investment team, and while we would say... I think to be successful in the insurance business, you have to be able to underwrite, service, risk manage, originate all assets that insurance companies call securities, loans, and income generating. That's the kind of the way we thought about it. At Global Atlantic at the time, while we could do a lot of that, we couldn't do all of it.
We didn't do it in an institutional way, and we didn't do it across the capital structure. Go to KKR in 2019. KKR, while it had a broad-based businesses and asset-backed finance and indirect lending and commercial real estate, it also had the potential to scale. its white space was it didn't actually underwrite across the capital structure. May have been good at the equity level, but it didn't actually do the senior level. fast forward, we do the deal. One of the rationales was the capabilities of combining our investment businesses, getting the scale, being more meaningful from an origination perspective.
Add that to the fact that we've had the growth that we've experienced over the last two years, what I see today, at least in the U.S., is, you know, we've got a fully built-out, scalable investment platform for an insurance business. I'm not going to speak to KKR more broadly, but for our business, gives us the opportunity. That's critical. In volatile markets, in changing markets, we need to be able to asset allocate and have access to assets across the spectrum. Securities, loans, income generating, critically important for us. We have that today in the U.S. with KKR. Okay. Where is there white space? Nothing's perfect, by the way. There's always opportunities for growth. A lot of that exists on the international side. I mean, I know for a Global Atlantic perspective, we do think there's opportunities there over time.
We have an approach to building businesses. We do it quietly, we do it patiently. We are both in this regard. I think as we envision the forward, there's definitely white space for Global Atlantic in Asia and in Europe, and certainly, I think KKR also has the opportunity to continue to scale in those markets as it makes sense over time.
Great. Why don't we come back to the block topic?
Sure.
Scott alluded to a favorable environment for blocks on the last earnings call, and then you recently announced the block transaction with MetLife. What are you seeing in terms of pipeline activity? What's your appetite for block transactions overall? How competitive is the space? You could just talk to the overall backdrop and maybe touch upon the MetLife transaction as well.
There's a lot of questions there. I'm gonna try to break that down into the following pieces. Let me talk a little about the MetLife deal because I think it's illustrative of our block business. I'll talk about the competitive environment with a little bit of history, if you'll indulge me a bit on that.
Sure.
I'll talk about appetite and what the pipeline looks like, if that makes sense. Look, we recently announced a $19 billion deal with MetLife, $13 billion in general account assets. Look, this is a really good illustration of what the power of our partnership is capable of doing. We were able to provide a highly customized solution to a blue chip client that helped them solve what they were looking to do. From our perspective, we were able to get a scale with access to $13 billion of general assets, which is great, where we've got capabilities to be able to invest. We also were able to get them with a liability set that we were able to deeply underwrite, had a lot of experience around, and feel really good about.
Like, that deal, I think is. By the way, if you think about the size and the execution capabilities to do something of that magnitude, not a lot of firms that have the capabilities to do that. We again, it was a headline transaction for us. Let's talk about the competitive environment. I know you're going to be meeting with a lot of firms. I appreciated the report you published, last week, I think it was. Very, very timely. 20 years ago, we kind of envisioned this business, I'll describe as the following: There were very few competitors, there were very few deals, and it was a novel idea to do a block reinsurance deal. The management teams were not thinking about doing this deals. I remember that vividly, by the way. Fast forward to today, 20 years later, okay?
There are a lot of competitors. There are a lot of transactions being done. It's no longer novel. If you're a, you know, mutual company, public company, private company, insurance space, you're considering block reinsurance transactions to reduce risk, free up capital to exit non-core lines of business. It's remarkable, looking back, how this has really changed in a lot of ways. Look, when I think about the competitive dynamic, I only focus on Global Atlantic, and we are fortunate enough with the franchise we've built. By the way, we've done over 25 reinsurance deals plus with different clients. I feel really fortunate that we can be selective on the deals that we compete in, and we're pretty ruthless with our time on where we choose to compete.
We prefer to focus on either bilateral discussion, where we're solving strategic issues for clients, or limited processes, and that's where you'll find our business model. We're also want to work with clients, and we want to work on transactions where the other attributes matter: credit quality, credit ratings, investment guidelines, track record. While there is a lot of competition, I do feel like in where we compete, there's a lot of opportunities for us to continue to win in the kind of transactions that we want. As far as the pipeline goes, even though we just completed the MetLife deal, the pipeline remains strong. We're definitely having dialogue with both new and existing clients right now. We continue to be engaged in the market with our clients, trying to create important solutions for them.
The other avenue for growth that we didn't get to talk to just yet is organic, and that's an important piece of the growth engine for you guys. Maybe you could talk a little bit about how you think about how does GA generate organic growth? How are you expanding your sales and distribution capabilities to further accelerate that, and any sort of quantification of how much we can expect annually?
Let's take a step back on our retail business or in the individual market business. 20 years later, clearly the best market we've ever seen. You think about our retirement product or annuities that we're selling, there is tremendous demand from a mass affluent, from retirees. We've got a solution that really works even better in a higher rate environment, and it becomes more attractive in a volatile market. You've seen our market expand. You know, just some fun facts, 'cause again, we're celebrating 10 years since we had separated from Goldman Sachs. The entire annuity business that year was about the same size as it was in the first quarter of this year. Between last year, or I guess 2021 and 2022, the market was up over 50%. Retirement solutions, annuities, big market opportunity. How are we positioned?
We've got a national sales force. We sell today through 200+ banks and broker-dealers. 90%-95% of what we sell is through financial institutions, including the largest firms, including Morgan Stanley. We continue to see opportunities to grow by adding additional distribution partners, and we're in active dialogue there. While we're a consistent top five firm, we're not in every firm. We add more firms. While we write the majority of the products in the retirement space, we don't write off, so we're continuing to look to add new products. There's while we're 90%-95% of the financial institution space, there's a whole other adjacent market called independent distribution that we have a very small share in today.
As that industry consolidates, and they look more like financial institutions, we think there's a really good opportunity for Global Atlantic as well. Just one last thing on growth I want to make sure I hit. All of this, on the individual market side in particular, needs to be supported by a modern technology platform. This is about providing scale and a great client experience, and we've been on a journey, and we actually, over the course of this year, have unveiled a new platform there as well. I think a lot of opportunities for us over time. You asked me about a number and how you can think about it. Last year, we had a record year, $10 billion in sales, and I think that's a good base for us to be able to grow off of on the forward.
Great, we're just about up on time.
Okay.
Just curious, final thoughts here as we conclude. The business has doubled in the last two-three years. You've delivered mid-teens or so, ROE. You know, what keeps you positive on the growth outlook from here? What do you see as some of the major drivers and the biggest opportunities as you look forward?
Yeah. Hopefully, over the course of my remarks, I will have highlighted some of those. When we think about managing our insurance business, I think about growth not in isolation. I think about growth in the following way. Like, we have opportunities to grow. I'll comment on this because you've asked. We also have to think about, because we're an insurance business, protecting our balance sheet, thinking about downsides, making sure we've got the right capital levels, the right liquidity, continuing to optimize our partnership with KKR. Lastly, we've got to continue to invest in our platform. Technology, operations, modern, efficient, scalable. To grow, all those other things really have to be in balance. I spend a lot of time thinking about that for our organization.
Specifically related to growth, look, we're highly methodical in how we think about it, highly thought that we think about where we want to invest in opportunities. Number one, we've got great tailwinds in the businesses that we're in. In this market environment, great retirement services, annuity market that continues to grow. That's tailwinds for our individual institutional business. We think that, again, that also helps our block business as well. Great environment for us. If we drill down, you know, we like to describe growth, and some of this I would have hit on already, like, can we grow our franchise businesses? We strive to be top three or top five in every business.
Good news is, we are top three or top five in some, but not all, but the ones that we're in, we think we have the potential to grow into. That's why we're in them, ultimately. By the way, we do that by growing our footprint, adding clients, adding products. All of that, we feel like there's an opportunity set for us to grow. There's a bunch of newer things that we invested in a couple of years ago. One of them is, like, the pensioner's transfer space. Another of them might be the registered investment-linked product on the individual side. These are new things for us that over time we think could be potentially growth opportunities as on the forward.
There's a bunch of emerging opportunities that we've had, and I would have touched on those over the course of my remarks as well. That would include international over time, but patiently and methodically as the opportunity presents itself. By the way, continuing to capitalize on the KKR partnership in ways that we haven't before. I think there are a lot of exciting and interesting opportunities for us to be able to grow on the forward.
Great. Well, I'm going to leave it there. Thank you very much, Allan.
Great. Thank you very much for the time, everyone. Most appreciated. Thank you.