8-K: Jackson Financial Inc. Announces First Quarter 2025 Results: Retail Annuity Sales Up 9%

Jackson Financial Inc. reports a 9% increase in retail annuity sales for Q1 2025, driven by growth across all product lines, alongside adjusted operating earnings of $376 million.

Summary

• Jackson Financial Inc. announced its financial results for the first quarter ended March 31, 2025.
• Retail annuity sales increased by 9% to $4.0 billion compared to the first quarter of 2024.
• Variable annuity sales also rose by 9% to $2.7 billion, with a significant increase in sales of variable annuities without lifetime benefits.
• Registered index-linked annuity (RILA) sales increased by 3% to $1.2 billion.
• Fixed and fixed index annuity sales increased significantly by 74% to $174 million.
• The company reported a net loss attributable to Jackson Financial Inc. common shareholders of $(35) million, or $(0.48) per diluted share, compared to a profit of $784 million, or $9.94 per diluted share in the first quarter of 2024.
• Adjusted operating earnings were $376 million, or $5.10 per diluted share, compared to $334 million, or $4.23 per diluted share in the first quarter of 2024.
• The increase in adjusted operating earnings was driven by higher spread income from growth in average RILA assets under management (AUM) and a reduction in the diluted share count due to common share repurchases.
• Average annuity AUM increased by 2% to $246 billion.
• The company's operating company has a robust capital position, with total adjusted capital of over $5.2 billion and an estimated risk-based capital (RBC) ratio at Jackson National Life Insurance Company (JNLIC) of 585%.
• Free cash flow for the quarter was $213 million, and nearly $1 billion for the 12 months ended March 31, 2025.
• Jackson returned $231 million to common shareholders through share repurchases and dividends.
• Cash and highly liquid securities at the holding company were over $600 million as of March 31, 2025, exceeding the targeted $250 million minimum liquidity buffer.

Sentiment

Score: 7

Explanation: The sentiment is moderately positive due to strong sales growth and improved operating earnings, despite a net loss. The company's robust capital position and commitment to shareholder returns further contribute to the positive outlook.

Positives

• Strong growth in retail annuity sales across all product lines, indicating a healthy demand for Jackson's offerings.
• Increase in adjusted operating earnings driven by higher spread income and share repurchases, reflecting improved profitability.
• Robust capital position and RBC ratio, providing financial stability and flexibility.
• Significant free cash flow generation, enabling shareholder returns and strategic investments.
• Healthy liquidity position at the holding company, ensuring financial resilience.

Negatives

• Net loss attributable to Jackson Financial Inc. common shareholders of $(35) million, primarily due to a loss on reinsured business.
• Unfavorable net hedging result compared to the prior year's first quarter, driven by equity index volatility.
• Decline in adjusted book value per share from $150.11 to $152.84, partially offset by capital return to shareholders, non-operating net hedging losses, and non-operating deferred acquisition cost (DAC) amortization.

Risks

• The company's results are subject to market risks, including equity index volatility, which can impact hedging results.
• Changes in actuarial assumptions and model enhancements can affect financial results.
• The results of reinsured business can vary significantly from quarter to quarter.
• Forward-looking statements are subject to known and unknown risks and uncertainties that may cause actual results to differ materially from those projected.

Future Outlook

Jackson anticipates building upon its momentum through the remainder of 2025 and delivering on its mission of helping Americans secure their financial futures.

Management Comments

• Laura Prieskorn, President and Chief Executive Officer of Jackson, stated, 'Our first quarter results demonstrate the continued strength of our business and progress on our strategic objectives.'
• She also noted the company's positive start toward achieving its financial targets, growing capital and RBC position, returning capital to shareholders, and retaining healthy levels of excess cash.

Industry Context

The announcement reflects the ongoing demand for retirement income solutions, particularly annuities, in a market characterized by increasing longevity and retirement planning complexities. Jackson's growth in RILA sales aligns with the broader industry trend of offering products that provide both growth potential and downside protection.

Comparison to Industry Standards

• Comparing Jackson's RBC ratio of 585% to peers like Athene (Apollo), Prudential, and MetLife, it appears to be within a competitive range, suggesting a strong capital buffer.
• The growth in RILA sales is consistent with industry trends, as companies like Lincoln National and Equitable have also reported increased demand for these products.
• Jackson's focus on returning capital to shareholders aligns with the strategies of other major players in the insurance and annuity space, such as Allianz and AIG, who are also actively engaged in share repurchase programs and dividend payouts.

Stakeholder Impact

• Shareholders will benefit from the increased dividend and share repurchase program.
• Customers will have access to a wider range of annuity products and services.
• Employees will have opportunities for growth and development within the company.
• Distribution partners will have access to a broader suite of products to offer their clients.

Next Steps

• Jackson will host a conference call on May 8, 2025, to review the first quarter results.
• The company anticipates building upon its momentum through the remainder of 2025.

Key Dates

Keywords

annuities, financial results, earnings, RILA, sales, Jackson Financial, JXN