8-K: Jackson Financial Inc. Reports Strong First Quarter 2024 Results Driven by Record RILA Sales and Improved Earnings

Jackson Financial Inc. announced a significant turnaround in its first quarter 2024 results, with net income of $784 million compared to a loss of $1.5 billion in the same period last year, driven by strong sales and improved market conditions.

Summary

• Jackson Financial Inc. reported a net income of $784 million, or $9.94 per diluted share, for the first quarter of 2024, a substantial improvement from a net loss of $1.5 billion, or $18.11 per diluted share, in the first quarter of 2023.
• Adjusted operating earnings increased by 23% to $334 million, or $4.23 per diluted share, compared to $271 million, or $3.15 per diluted share, in the same quarter of the previous year.
• The company achieved record sales of registered index-linked annuities (RILA) at $1.2 billion, a 117% increase from $533 million in the first quarter of 2023.
• Total annuity assets under management reached $248 billion as of March 31, 2024, a 13% increase from $219 billion as of March 31, 2023.
• Jackson returned $172 million to shareholders through $116 million in share repurchases and $56 million in common dividends.
• The company's statutory total adjusted capital (TAC) at Jackson National Life Insurance Company (JNLIC) was nearly $4.7 billion as of March 31, 2024, with an estimated risk-based capital (RBC) ratio of 555-575%.
• Cash and highly liquid securities at the holding company were nearly $500 million as of March 31, 2024, exceeding the targeted minimum liquidity buffer.

Sentiment

Score: 8

Explanation: The document conveys a strong positive sentiment due to the significant improvement in financial results, record sales, and robust capital position. The management's comments are also optimistic, indicating confidence in future performance. However, some negative aspects such as the decrease in TAC and RBC ratio, and losses in the Corporate and Other segment, temper the overall sentiment slightly.

Positives

• The company experienced a substantial increase in net income, turning a $1.5 billion loss in Q1 2023 into a $784 million profit in Q1 2024.
• Adjusted operating earnings saw a significant 23% increase year-over-year.
• Record RILA sales indicate successful product diversification and strong market demand.
• Total annuity assets under management grew by 13%, reflecting positive market performance and business growth.
• The company's capital position remains robust, with a strong RBC ratio and healthy liquidity.
• Shareholder returns were substantial, with $172 million returned through buybacks and dividends.

Negatives

• Institutional Products experienced net outflows of $596 million in the first quarter.
• The Corporate and Other segment reported a pretax adjusted operating loss of $80 million, a decline from the previous year's loss of $43 million.
• Statutory total adjusted capital at JNLIC decreased from $5.2 billion at the end of 2023 to nearly $4.7 billion as of March 31, 2024.
• The estimated RBC ratio at JNLIC decreased from 624% at the end of 2023 to 555-575% as of March 31, 2024.

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.
• Market volatility and changes in interest rates can significantly impact the company's financial results.
• The results of reinsured business can be volatile quarter to quarter.
• The company's non-GAAP financial measures may not be comparable to those of other companies.

Future Outlook

The company expects to build upon the current momentum through the remainder of 2024 and continue to deliver on its mission of helping Americans achieve financial freedom for life.

Management Comments

• Laura Prieskorn, President and CEO of Jackson, stated that the first quarter results demonstrate significant momentum across the business, including the successful establishment of the Brooke Re captive reinsurance solution.
• She also noted that retail annuity sales were up nearly 20% from the first quarter of 2023, driven by record RILA sales.
• Management is positive about the start to their financial targets, growing capital and RBC position, returning capital to shareholders, and maintaining healthy levels of excess cash.

Industry Context

The strong performance in RILA sales reflects a broader trend in the insurance industry towards products that offer both growth potential and downside protection. The establishment of Brooke Re is a strategic move to manage capital and risk more effectively, which is becoming increasingly important in the current economic environment.

Comparison to Industry Standards

• Jackson's 23% growth in adjusted operating earnings is a strong result compared to some of its peers in the insurance sector, many of whom are facing headwinds from market volatility and interest rate fluctuations.
• The record RILA sales of $1.2 billion demonstrate a strong competitive position in the growing market for index-linked annuities, outperforming many competitors in this product category.
• While the RBC ratio decreased from the end of 2023, the current level of 555-575% is still considered healthy and above regulatory minimums, comparable to other large insurance companies.
• The return of $172 million to shareholders through buybacks and dividends is a positive sign of financial strength and shareholder focus, which is in line with industry best practices for capital management.

Stakeholder Impact

• Shareholders benefit from the improved financial performance, share repurchases, and dividends.
• Customers benefit from the company's commitment to providing financial products and services.
• Employees benefit from the company's overall success and stability.
• Distribution partners benefit from the company's strong sales and product offerings.

Next Steps

• Jackson will host a conference call on May 9, 2024, to review the first quarter results.
• The company will continue to focus on growing its business and delivering on its mission of helping Americans achieve financial freedom for life.

Key Dates

Keywords

Jackson Financial, Annuities, RILA, Financial Results, Operating Earnings, Share Repurchases, Dividends, Assets Under Management, Reinsurance, Capital, RBC Ratio