7 Insurance Segment Our reported Insurance segment only reflects the results of Front Street, our reinsurance business Our discontinued operation, Fidelity & Guaranty Life, reported very solid 2nd quarter results Insurance segment: — At Front Street, net book value increased 10% from 1Q16 to nearly $94 million FGL business: — Adjusted operating income at FGL nearly doubled as compared to 2Q15 — Average assets under management at FGL increased 4.8% to $18.5 billion — FGL’s investment portfolio continues to perform very well, with across-the-board increases: — Average earned yield increased 19 basis points from 2Q15 to 4.91% — Net investment income of $227 million, up 9% from 2Q15 —Net investment spreads across all product lines increased 36 basis points from 2Q15 — Average NAIC rating remains approximately 1.5 — FGL’s GAAP book value, excluding AOCI, increased to $1.47 billion Transaction between FGL and Anbang is progressing: —Received clearance for the transaction from the Committee on Foreign Investment in United States this quarter — Progressing the remaining regulatory approvals and expect to close this transaction in the 3rd calendar quarter
