8-K: Jackson Financial Inc. Reports Strong First Quarter 2024 Results, Driven by Retail Annuity Sales and Capital Generation

Jackson Financial Inc. announced strong first quarter 2024 results, highlighted by an 18% increase in retail annuity sales and significant capital returns to shareholders.

Summary

• Jackson Financial Inc. reported a strong first quarter of 2024, with adjusted operating earnings of $334 million.
• GAAP net income attributable to common shareholders was $784 million, or $9.94 per share.
• Adjusted operating earnings per share were $4.23.
• Retail annuity sales increased by 18% compared to the same quarter last year.
• The company returned $172 million to shareholders through dividends and share repurchases in the first quarter.
• Jackson Financial has returned a cumulative total of $1.4 billion to common shareholders since becoming a standalone public company.
• The company has repurchased 22.1 million shares, representing over 23% of outstanding common shares at separation.
• The estimated risk-based capital (RBC) ratio for Jackson National Life Insurance Company is between 555% and 575%.
• Holding company cash and highly liquid securities totaled nearly $500 million as of the end of the first quarter.
• Total common shareholders' equity was $9.6 billion, in line with the end of 2023.
• Adjusted book value attributable to common shareholders was $11.4 billion, up from the end of 2023.

Sentiment

Score: 8

Explanation: The document presents a very positive outlook with strong financial results, increased sales, and a commitment to returning capital to shareholders. The company's strong capital position and diversified investment portfolio further contribute to a positive sentiment.

Positives

• The company experienced strong growth in retail annuity sales, with an 18% increase year-over-year.
• Jackson Financial has demonstrated a commitment to returning capital to shareholders, with $172 million returned in the first quarter.
• The company's capital position is strong, with an estimated RBC ratio between 555% and 575%.
• The company has a healthy level of liquidity, with nearly $500 million in holding company cash and highly liquid assets.
• Adjusted book value attributable to common shareholders increased to $11.4 billion.
• The company is seeing increased diversification in its product mix, with more than half of annuity sales now without lifetime benefit riders.
• RILA sales are experiencing significant growth, with a 117% increase year-over-year.
• Non-VA net flows have more than doubled compared to the same quarter last year.
• The company's economic hedging approach is better aligned with GAAP, leading to more stable results.
• The company's investment portfolio is high quality and diversified.

Negatives

• The document notes that certain non-GAAP financial measures may not be comparable to those of other companies.
• The company's results are subject to market risks and uncertainties that could cause actual results to differ materially from forward-looking statements.
• The company's exposure to below investment grade securities is 6% of the total investment portfolio, which is almost entirely corporate bonds and loans, although this is reduced to 1% when excluding consolidated CLO investments.

Risks

• The company's forward-looking statements are subject to known and unknown risks and uncertainties that may cause actual results to differ materially.
• Market conditions and economic factors could impact the company's financial performance.
• Changes in interest rates and equity market volatility could affect the company's results.
• The company's hedging strategies may not fully mitigate all risks.
• The company's investment portfolio is subject to credit risk and market risk.
• The company's exposure to below investment grade securities could lead to losses.

Future Outlook

The company is on track to deliver on its 2024 key financial targets and remains positive about its long-term value creation for shareholders.

Management Comments

• Management believes that the use of non-GAAP financial measures provides a better understanding of the company's results of operations, financial condition, and underlying performance drivers.
• Management believes the adjustments to net income are useful for gaining an understanding of the company's overall results of operations.

Industry Context

The results reflect a positive trend in the annuity market, with increased sales and a focus on capital management. The company's diversification efforts in product mix and sales channels align with broader industry trends.

Comparison to Industry Standards

• The company's RBC ratio of 555-575% is well above the regulatory minimum, indicating a strong capital position compared to industry benchmarks.
• The company's focus on returning capital to shareholders is in line with industry trends of prioritizing shareholder value.
• The growth in RILA sales reflects a broader industry trend towards market-linked products with downside protection.
• The company's diversified investment portfolio is consistent with industry best practices for managing risk.

Stakeholder Impact

• Shareholders will benefit from the strong financial results and capital returns.
• Employees will benefit from the company's continued success and growth.
• Customers will benefit from the company's strong financial position and ability to meet its obligations.
• Suppliers and creditors will benefit from the company's financial stability.

Next Steps

• The company will continue to focus on delivering on its 2024 key financial targets.
• The company will continue to monitor market conditions and adjust its strategies as needed.
• The company will continue to manage its capital position and return value to shareholders.

Key Dates

Keywords

annuities, capital return, RBC ratio, adjusted operating earnings, retail sales, hedging, investment portfolio, share repurchases, dividends, financial results