8-K: Jackson Financial Inc. Announces Strong Fourth Quarter and Full Year 2024 Results, Driven by Annuity Sales Growth

Jackson Financial Inc. reports a significant increase in retail annuity sales and adjusted operating earnings for both the fourth quarter and full year 2024, driven by growth in variable annuity AUM and strategic capital management.

Summary

• Jackson Financial Inc. announced its financial results for the fourth quarter and full year ended December 31, 2024.
• Retail annuity sales for the fourth quarter reached $4.7 billion, a 42% increase compared to the same period in 2023.
• Variable annuity sales rose by 27% to $2.8 billion, while registered index-linked annuity (RILA) sales increased by 47% to $1.5 billion.
• Fixed and fixed index annuity sales saw a substantial increase, reaching $397 million, up from $79 million in the fourth quarter of 2023.
• Total annuity assets under management (AUM) grew by 7% to $252 billion as of December 31, 2024.
• Net income attributable to Jackson Financial Inc. common shareholders was $334 million, or $4.45 per diluted share, compared to a loss of $(1.6) billion, or $(19.64) per diluted share in the fourth quarter of 2023.
• Adjusted operating earnings were $349 million, or $4.65 per diluted share, compared to $204 million, or $2.53 per diluted share in the fourth quarter of 2023.
• The company returned $148 million to common shareholders in the fourth quarter through share repurchases and dividends.
• For the full year 2024, retail annuity sales totaled $17.8 billion, a 39% increase from 2023.
• Net income attributable to common shareholders was $902 million, or $11.74 per diluted share, compared to $899 million, or $10.76 per diluted share in 2023.
• Adjusted operating earnings for the full year were $1.4 billion, or $18.79 per diluted share, compared to $1.1 billion, or $12.84 per diluted share in 2023.
• The company generated robust capital, with total adjusted capital of $5.1 billion and an estimated risk-based capital (RBC) ratio at Jackson National Life Insurance Company (JNLIC) of 572%.
• Free cash flow in 2024 was $767 million, reflecting distributions from the operating company of $875 million.
• Jackson returned $631 million to common shareholders in 2024 through share repurchases and dividends.
• The company's cash and highly liquid securities at the holding company exceeded $700 million as of December 31, 2024.
• Jackson increased its first quarter 2025 common dividend by 14% to $0.80 per share and established a 2025 capital return target of $700-800 million.

Sentiment

Score: 9

Explanation: The document presents a highly positive outlook with significant growth in key financial metrics, strong capital management, and a commitment to returning value to shareholders. The management's comments further reinforce this positive sentiment.

Positives

• Significant growth in retail annuity sales across all product lines, indicating strong market demand and effective distribution strategies.
• Substantial increase in adjusted operating earnings, driven by higher variable annuity AUM and improved spread income.
• Robust capital generation and a high RBC ratio, demonstrating financial strength and stability.
• Consistent return of capital to shareholders through share repurchases and dividends, enhancing shareholder value.
• Strong cash position at the holding company, providing financial flexibility for future investments and strategic initiatives.
• Increased first quarter 2025 common dividend by 14% to $0.80 per share, signaling confidence in future performance.
• The company experienced greater stability in net income, better alignment between capital generation and non-GAAP adjusted operating earnings, and delivered more frequent distributions from our operating company.

Negatives

• Corporate and Other reported a pretax adjusted operating income (loss) of $(57) million in the fourth quarter of 2024, unchanged from the fourth quarter of 2023.
• For the full year 2024, the pretax adjusted operating income (loss) was $(264) million, compared to $(173) million in full year 2023.
• The decline was primarily due to lower net investment income, and a reinsurance-related adjustment.

Risks

• The company's forward-looking statements 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 Part I, Item 1A. Risk Factors and Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended December 31, 2023, as filed with the U.S. Securities and Exchange Commission (the SEC) on February 28, 2024, and elsewhere in the Company's reports filed with the SEC.
• The results of reinsured business can differ significantly from quarter to quarter; however, these results do not impact our statutory capital or free cash flow and have a minimal net impact on shareholders equity because of the offset from related changes in Accumulated Other Comprehensive Income (AOCI).
• The current year also included a less favorable net hedging result compared to the prior year due to larger losses on hedges resulting from increases in interest rates during 2024.

Future Outlook

Jackson has established a 2025 capital return target of $700-800 million to common shareholders, reflecting confidence in its financial performance and capital generation capabilities.

Management Comments

• Laura Prieskorn, President and Chief Executive Officer of Jackson, stated, 2024 was a tremendous year of momentum for Jackson, with our financial performance highlighting success across our business.
• Prieskorn noted that full year retail annuity sales were up 39% with growth across all product lines, demonstrating distribution strength and a continued focus on offering differentiated and innovative solutions.
• She also highlighted the achievement of financial targets by returning $631 million to common shareholders in 2024, ending the year with an estimated RBC ratio well above the target of 425%, and holding robust levels of excess cash at the holding company.
• Prieskorn expressed confidence in the $700-800 million capital return target for 2025, positioning the company well to continue delivering on its mission of helping Americans achieve financial freedom for life.

Industry Context

The announcement reflects a broader trend in the insurance industry towards increased demand for annuity products, driven by an aging population and a growing need for retirement income solutions. Jackson's strong performance in annuity sales positions it well to capitalize on these trends and compete effectively in the market.

Comparison to Industry Standards

• While specific competitor data isn't provided, a 572% RBC ratio suggests Jackson is well-capitalized compared to the industry average.
• Companies like Athene and Apollo Global Management, which are major players in the annuity and retirement services market, often target similar RBC ratios to maintain financial strength.
• The growth in RILA sales is notable, as this product category has been gaining traction across the industry, with companies like Prudential and Lincoln National also reporting strong growth in this area.
• Jackson's capital return program is competitive, with a target of $700-800 million for 2025, demonstrating a commitment to shareholder value.

Stakeholder Impact

• Shareholders will benefit from increased dividends and share repurchases.
• Customers will benefit from the company's continued focus on offering differentiated and innovative annuity solutions.
• Employees will benefit from the company's strong financial performance and commitment to growth.
• Distribution partners will benefit from the company's strong distribution network and product offerings.

Next Steps

• Jackson will host a conference call on February 20, 2025, to review the fourth quarter and full year 2024 results and discuss the company's 2025 outlook.
• The company will focus on achieving its 2025 capital return target of $700-800 million to common shareholders.

Key Dates