8-K: Jackson Financial Inc. Announces Strong 2024 Financial Results and Increased Capital Return Target

Jackson Financial Inc. reports robust full-year 2024 results, highlighted by GAAP earnings of $902 million and a 14% increase in the quarterly dividend to $0.80 per share for 1Q25.

Summary

• Jackson Financial Inc. reported GAAP earnings of $902 million and non-GAAP earnings of $1.4 billion for the full year 2024.
• GAAP earnings per share were $11.74, while non-GAAP earnings per share reached $18.79.
• The company returned $631 million of capital to common shareholders in 2024 and targets $700-$800 million for 2025.
• Jackson National Life Insurance Company's (JNLIC) estimated risk-based capital (RBC) ratio was 572% at year-end 2024.
• Holding company cash and highly liquid securities exceeded $700 million at year-end 2024.
• Retail annuity sales increased to $17.8 billion in 2024, up from $12.8 billion in 2023.
• The company's board increased the 1Q25 common dividend by 14% to $0.80 per share.
• Free capital generation exceeded $1 billion for 2024 and is expected to exceed $1 billion for 2025 under normal market conditions.
• Free cash flow at the holding company increased over 50% due to strong operating company distributions.
• The company's investment portfolio remains high quality and diversified, with a market/book ratio of 0.93 for the fixed maturity portfolio.

Sentiment

Score: 8

Explanation: The document presents a positive outlook with strong financial results, increased capital return targets, and a healthy capital position. While forward-looking statements are subject to risks, the overall tone is optimistic and suggests confidence in the company's future performance.

Positives

• Strong GAAP and non-GAAP earnings performance for 2024.
• Significant capital return to shareholders, with an increased target for 2025.
• High RBC ratio for JNLIC, indicating a strong capital position.
• Robust holding company liquidity.
• Increased retail annuity sales, demonstrating growth in the business.
• Increased quarterly dividend, reflecting confidence in future performance.
• Strong free capital generation and free cash flow.
• High-quality and diversified investment portfolio.

Negatives

• The document mentions that certain financial data included in the presentation consists of non-GAAP financial measures, which may not be comparable to similarly titled measures presented by other entities.
• The document cautions investors not to place undue reliance on any non-GAAP financial measures and ratios included in the presentation.

Risks

• The document contains forward-looking statements that are subject to known and unknown risks and uncertainties that may cause actual results to differ materially from those projected.
• Factors that could cause actual results to differ materially from those in the forward-looking statements include those reflected in the company's reports filed with the SEC.
• The company's financial results are dependent on the performance of contract holder account values and the ability to earn a spread between earned investment rates and interest credited to contract holders.

Future Outlook

The company targets a capital return of $700-$800 million to common shareholders in 2025 and expects free capital generation to exceed $1 billion under normal market conditions. The quarterly dividend was increased by 14% to $0.80 per share for 1Q25.

Industry Context

Jackson Financial's focus on retail annuity sales and capital generation aligns with industry trends emphasizing retirement income solutions and shareholder value. The company's strong RBC ratio and liquidity position provide a competitive advantage in a market where financial strength is paramount.

Comparison to Industry Standards

• A 572% RBC ratio is generally considered strong compared to the regulatory minimum, and is comparable to other well-capitalized insurance companies such as Prudential Financial and MetLife.
• The increase in retail annuity sales is in line with the broader industry trend of increased demand for retirement income products, driven by an aging population and concerns about retirement security.
• The company's capital return target is competitive with other publicly traded insurance companies, such as Lincoln National and Athene, which have also been actively returning capital to shareholders through dividends and share repurchases.

Stakeholder Impact

• Shareholders will benefit from increased capital returns and dividends.
• Employees can expect continued stability and growth opportunities within the company.
• Customers will have access to a diverse suite of retirement income and savings products.
• Suppliers and creditors can rely on the company's strong financial position.

Next Steps

• The company will hold an earnings call on February 20, 2025, to discuss the fourth quarter and full year 2024 financial results.
• The company intends to continue returning capital to shareholders through dividends and share repurchases.
• The company will focus on maintaining a strong balance sheet and robust levels of liquidity.
• The company will continue to diversify its retail annuity product mix.

Key Dates